The Australian Financial Complaints Authority (AFCA) has announced that it will provide a nine-day extension for consumers, small businesses and financial firms to respond to complaints during the coronavirus pandemic.
The extension comes into effect immediately and will apply to all complaints, including those relating to financial difficulty.
Financial firms normally have 21 days to respond when AFCA notifies them that a complaint has been lodged, but they will now have 30 days.
AFCA is also providing as standard a flat 21-day time frame to provide an initial response, once the dispute reaches the case management stage.
The changes are a temporary measure, which AFCA predicts would be in place for up to six months and would be reviewed and adjusted as appropriate. All internal dispute resolution refer back time frames remain unchanged.
AFCA CEO and chief ombudsman David Locke said AFCA was aware of the difficult circumstances financial firms and the community are facing, and said the extension aims to provide all parties involved sufficient time to work together to resolve the complaint.
“AFCA has been talking to key stakeholders and has heard the complexities facing financial firms, small business and consumers in the current environment,” Mr Locke said.
“This extension allows financial firms more time to resolve disputes with their customers, without the need to come to AFCA for an external dispute resolution service.
“This recognises the pressure some parts of the financial services industry are under, with unprecedented levels of customer queries and financial hardship requests. It also gives consumers more realistic expectations about when they will get a response.”
Mr Locke said that where parties are unable to resolve complaints on their own, the extension provides them with more time to gather documentation and other material required by AFCA.
He also emphasised that if a financial difficulty case has been brought to AFCA, then from a consumer perspective, no enforcement action can be taken while the matter is with the complaints authority.
AFCA recently announced that it would alter its approach to dispute resolution to reflect government and regulatory responses to the coronavirus outbreak.
It said that while it would “prioritise and fast-track” complaints relating to the coronavirus crisis, it would “take into account the circumstances and context in which lenders and other financial firms are currently operating” when considering complaints.
AFCA acknowledged that firms may be putting in place alternate staffing arrangements and “may not be in a position to quickly act on requests for information”.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.