 ASIC sues General Commercial (Urban Commercial) and Eden Capital (Southside Lending) for failure to cooperate with AFCA As advocates for consumers in the financial space, SR Group welcome action that illustrates consumers are fairly supported if and when they have the need to lodge a dispute through AFCA. SR Group are pleased to see that ASIC is serious about taking action against firms that do not comply with AFCA, thereby promoting the reliability and fundamental principles of the AFCA scheme itself What is ASIC?The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to protect Australian consumers, investors and creditors. Their duties under the ASIC Act are to:
What is AFCA?AFCA is the ombudsman for the financial services industry and is a free service that resolves disputes between consumers and financial service providers. AFCA have the ability to make binding determinations to resolve disputes, which means that if AFCA decide that a company must pay a consumer compensation, the company is obligated to do so. In some cases, companies refuse to pay compensation (or are unable to) that AFCA has awarded – these situations are why the CSLR (Compensation Scheme of Last Resort) was developed to assist in further protecting and compensating consumers. All Australian financial services and credit licensees are required to hold an AFCA membership as a condition of their licence. AFCA is a hugely important part of our financial services industry that allows consumers and financial firms to resolve complaints in a timely, cost-effective manner, without the need for legal proceedings. From SR Group’s perspective, compliance with AFCA is extremely important as it promotes fairness and transparency in the industry and signals to consumers that there are avenues to seek assistance from should they incur issues with their financial services company. How do ASIC and AFCA work together for consumers?All Australian financial services and credit licensees are required to hold an AFCA membership as a condition of their licence. AFCA is a hugely important part of our financial services industry that allows consumers and financial firms to resolve complaints in a timely, cost-effective manner, without the need for legal proceedings. From SR Group’s perspective, compliance with AFCA is extremely important as it promotes fairness and transparency in the industry and signals to consumers that there are avenues to seek assistance from should they incur issues with their financial services company. ASIC’s role in the AFCA process is, essentially, to oversee and uphold compliance and regulation within the AFCA framework. They do not assist consumers directly in dispute resolution but do have powers to issue further directions to AFCA. ASIC commences legal proceedingsOn 2 August 2021, ASIC commenced legal proceedings in the Federal Court against General Commercial Group Pty Ltd and Eden Capital Pty Ltd for failing to co-operate with the Australian Financial Complaints Authority (AFCA). ASIC alleges that these entities failed to comply with an AFCA determination to compensate a consumer, and further, threatened and initiated legal action against both the complainant for making a complaint, as well as the AFCA staff member working on resolving the complaint. What does this show?ASIC’s actions in this case show that compliance and co-operation with AFCA is mandatory for all financial service providers and that serious punishments apply for failing to comply with these obligations. SR Group are pleased to see that ASIC is serious about taking action against firms that do not comply with AFCA, thereby promoting the reliability of the AFCA process. As advocates for consumers in the financial space, we welcome actions that show consumers are supported and that there is fairness in outcomes when and if they ever have the need to lodge a dispute through AFCA. Lodging a dispute with AFCALodging a dispute with AFCA can be a time consuming and overwhelming process for those who are or have been experiencing financial distress.
If you require assistance, we are able to help. Please do not hesitate to contact us on (02) 8304 9300 for an obligation free phone call to discuss your situation confidentially. Comments are closed.
|