ASIC warning to AFCA laggards
The resistance of some credit representatives to the establishment of the Australian Financial Complaints Authority (AFCA) appears to be manifesting in their tardiness in signing up to the new one-stop-shop complaints-handling authority.
The Australian Securities and Investments Commission (ASIC) revealed that while more than 35,000 financial firms have now joined the AFCA scheme, there are still 300 licensed financial firms who have failed to do so and most of them were previously members of the Credit and Investments Ombudsman Service.
Importantly, it was the Credit and Investments Ombudsman which, alongside a number of superannuation funds, most vigorously opposed being included in the Government’s one-stop-shop AFCA approach.
ASIC said a number of credit representatives who were obliged to join the AFCA arrangements were also dragging their feet and warned that if licensees were not a member of the external dispute resolution scheme by 21 September, they were in breach of their license obligations.
It said that credit representatives were required to join AFC by 1 November and that their authorisation would become invalid and they would need to cease engaging in credit activities if they failed to do so.
ASIC said it was receiving regular membership updates from AFCA and was contacting firms which had not taken out AFCA membership or responded to AFCA communications.
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