The Australian Financial Complaints Authority will begin naming financial firms in its published determinations to increase transparency in the financial sector and enhance consumer confidence.
The change comes following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
AFCA undertook a public consultation and submitted an application to the Australian Securities and Investments Commission (ASIC) to change the AFCA Rules.
AFCA Chief Ombudsman and CEO David Locke said AFCA is committed to being open, transparent and accountable to the public.
“AFCA plays an important public role and we recognise that transparency in our data and decisions is essential to rebuilding trust in the financial sector,” Mr Locke said.
“We already publish decisions on our website, but we have been unable to name the financial firms involved.
“We welcome ASIC’s approval to change our Rules, which will allow us to now name financial firms in decisions we publish on our website.
“This is an important change, and the public will now be able to access increased information about the actions of financial firms.”
AFCA is working with ASIC to determine the start date for the naming of financial firms. Further updates will be provided when available.
ASIC has approved changes to the Australian Financial Complaints Authority (AFCA) Rules to allow the scheme to name financial firms in published determinations.
In its first six months, AFCA received 35,263 complaints. About 4,500 to 5,000 complaints are currently expected to be finalised each year by way of determination. While the publication of determinations has been a longstanding feature of the external dispute resolution schemes in Australia, the names of firms involved in financial services, superannuation and credit complaints have not been published to date.
AFCA applied for approval to change their Rules to enable identification of firms following public consultation. Consumers who are party to a complaint will continue to be anonymised in all determinations.
In approving this change ASIC took into account stakeholder feedback to AFCA’s public consultation and the statutory approval criteria.
ASIC’s view is that naming firms in determinations can help identify conduct or market problems within firms or affecting specific products or services, as well as highlighting where firms have done the right thing. It will also enhance transparency and accountability of firms’ performance in complaints handling and of AFCA’s own decision-making.
To support the new Rules, AFCA will shortly be issuing updated operational guidelines which set out examples of the circumstances in which a determination naming a financial firm would not be published. This includes where naming may expose confidential information about a firm’s systems or policies.
Naming firms in AFCA determinations is part of a broader set of reforms aimed at increasing transparency in financial services. This includes Parliament giving ASIC power to collect and to publish internal dispute resolution (IDR) data at firm level. The UK Financial Ombudsman Service has been naming firms in published determinations since 2013
