No certainty on Govt’s EDR legislation
The Government appears far from certain of getting its legislation underpinning the establishment of the Australian Financial Complaints Authority (AFCA) through the Parliament intact in the face of continuing industry resistance to the inclusion of the Superannuation Complaints Tribunal (SCT).
That resistance manifested most significantly from the industry funds which have expressed significant reservations about the inclusion of the SCT – something which is expected to be reflected in the attitude of the Federal Opposition and the Australian Greens when the legislation reaches the Parliament.
As well, the Credit and Investments Ombudsman (CIO) Raj Venga has continued to slam the formation of the AFCA as backward step and something which will end up costing the industry more than the present regime.
Venga claimed the industry was being “sold a pup” by a Government desperate to avoid the holding of a Royal Commission.
"We’re being sold a pup. AFCA will have no greater or effective powers than [the Financial Ombudsman Service] FOS, CIO and the SCT. It ticks none of the boxes and it fixes nothing. AFCA is a pitiful attempt to fend off calls for a Royal Commission,” he said.
"It also makes absolutely no sense to design a scheme such as AFCA without the benefit of the findings of a Royal Commission’.
"AFCA is not fit for purpose. It will neither provide better consumer outcomes nor be able to address past, or prevent future, financial scandals.”
The introduction of the legislation necessary to establish the AFCA has been welcomed by the Financial Services Council (FSC), the Australian Banker’s Association, the Insurance Council of Australia and FOS.
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