‘Name and shame’ on non-compliant AFCA members
Multiple industry organisations have shared their thoughts on AFCA’s proposed rules amendment, supporting the idea of firms being named publicly when they fail to comply with determinations.
The two organisations responded to a consultation paper on AFCA rules, of which one question focused on the ability of AFCA to identify firms that have failed to comply in the interest of an effective and transparent process.
Between 1 April 2024 and 31 March 2025, 64 financial firms failed or refused to comply on at least one occasion to give effect to a determination. This activity by an AFCA member is described as being a “serious breach” which may lead to expulsion from the organisation and, separately, can lead to the loss of an Australian Financial Services Licence (AFSL).
“As part of enhancing transparency and increasing consumer, industry and broader public awareness of instances when there has been such non-compliance, AFCA considers that being able to publish the name of a financial firm that does not comply with a determination is an important and appropriate amendment to its rules,” it suggested.
Most recently, DOD Bookkeeping saw its AFSL cancelled in November 2024 for failing to pay an AFCA determination which led to a Compensation Scheme of Last Resort (CSLR) payment, while Viridian Equity Group lost its AFSL in April 2025 for the same reason.
In response, the Stockbrokers and Investment Advisers Association (SIAA) said it “strongly supports” such a measure due to the impact these firms have on the CSLR and respective fee levy.
“The failure of a financial firm to comply with an AFCA determination is a lead indicator for CSLR claims as these firms are most likely to be those that are placed into administration. That means that any unpaid determinations are referred to the CSLR for payment and must be included in the levy calculation,” it said.
“It is vital for our members that there is full transparency of the status and amount of unpaid AFCA determinations, as well as the identity of the financial firm in default. Essentially from our members’ perspective, the more information that is made publicly available by AFCA concerning these unpaid determinations the better.”
The organisation even went a step further and suggested keeping a progressive count of the firms affected.
“SIAA recommends that AFCA provide real-time reporting of this information as well as monthly updates and a progressive count by firm.”
Meanwhile, a submission from the Financial Advice Association Australia (FAAA) produced jointly with the Institute of Public Accountants, SMSF Association, CPA Australia and Chartered Accountants ANZ, also supported the proposal.
The organisations said it was their belief the threat of publication would provide an “additional incentive” for firms to do the right thing regarding determinations.
“Consumers of financial services should have visibility of firms that have failed to meet their obligations, particularly where related entities of those failed firms are continuing to operate. It will also help financial firms to hold other firms accountable and facilitate the reporting of phoenixing activity.
“The threat of publication of this information provides an additional incentive for financial firms to pay their determinations on time and without delay or refusal. We would expect that the consequences of being named by AFCA would be an important motivator.”
AUTHOR
Laura Dew
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