Explained: Financial Complaints Authority and how it can help you

Australia’s financial dispute resolution scheme has reached a major milestone – five years in operation.

In that time, consumers have taken more than 400,000 disputes to the Australian Financial Complaints Authority (AFCA) in that time, securing a total of $1.2 billion in compensation and refunds.

Since starting operations in November 2018, AFCA has worked with more than 16,500 victims of scams, more than 7500 people affected by natural disasters and more than 30,000 people experiencing financial difficulty.

It registered more than 17,000 COVID-related complaints during the pandemic, helping to resolve disputes involving financial products such as travel insurance and superannuation.

In addition, AFCA’s systemic issues work – where it identifies wider issues than a single complaint – resulted in 4.9 million people receiving more than $340 million in compensation.

David Locke, AFCA CEO and chief ombudsman, says his team is motivated by the very real people behind the complaints.

“We have dealt with hundreds of thousands of cases over the past five years, but we are fully aware that behind every complaint is an individual, a family or small business,” he says.

“We know how stressful a financial dispute can be, and how critical it is to help consumers and firms resolve their differences.

What kind of complaints does AFCA handle?

AFCA considers complaints that previously would have been handled by either the Financial Ombudsman Service, the Credit and Investments Ombudsman or the Superannuation Complaints Tribunal.

The range of complaints that can be resolved by AFCA include credit, loans, insurance, banking deposits, payments, investments, financial advice and superannuation.

AFCA’s role is to assist consumers to reach agreements with financial firms about how to resolve their complaints. They are impartial and independent.

They do not act for either party to advocate their position. If a complaint does not resolve between the parties, then it will decide an appropriate outcome.

Decisions AFCA makes can be binding on the financial firm involved in a complaint.

AFCA can award compensation for losses suffered because of a financial firm’s error or inappropriate conduct.

There are other remedies AFCA can also provide for superannuation complaints, although it does not award compensation to punish financial firms or impose fines.

AFCA is not a government department or agency and is not a regulator of the financial services industry.

How AFCA resolves complaints

AFCA has two informal methods available to it to help resolve complaints – negotiation or conciliation. If these informal methods of resolving a complaint don’t work, then it can proceed on to a formal method for trying to resolve the complaints.


Often AFCA will work to resolve a complaint with the parties by helping them negotiate a settlement.

This may involve exchanging settlement offers and discussing them with each party.

To assist negotiations, AFCA may provide guidance about the type of outcome that might occur if a settlement is not negotiated and the complaint proceeds to determination.


Sometimes AFCA will hold a telephone conciliation conference with both parties. This is conducted informally. It provides the parties with a chance to hear the other’s perspective in a conversation facilitated by independent arbiter.

During a conciliation AFCA will normally provide the parties with guidance on the issues raised in the complaint and what outcome might be provided if the complaint proceeds to determination.

If negotiations or a conciliation conference do not achieve an agreed settlement, AFCA will decide the complaint.

Formal methods

If informal methods to resolve a complaint don’t work, or there is a reason to progress the matter without conducting any negotiations or conciliation with the parties, AFCA will make a decision on the merits of the complaint (also referred to as a determination).

Often, AFCA will provide the parties with a preliminary assessment before making a binding decision.

A preliminary assessment includes:

  • an overview of the facts of the complaint
  • the issues raised in the complaint and AFCA’s preliminary assessment of those issues
  • how AFCA thinks the complaint should be resolved and why.

AFCA will give the parties seven days (for fast-track complaints) or 30 days (for other complaints) to explain whether they are willing to settle a complaint based on the preliminary assessment provided or, alternatively, whether they want the complaint to proceed to a determination.


A determination is the final stage in the complaint resolution process.

A determination will be made in writing and will outline the reasons for the decision.

Any remedy that AFCA awards, whether it be monetary compensation or some other remedy, will also be included. The financial firm is required to comply with the decision.

The determination will set out:

  • the relevant factual information available at the time of making the determination
  • the relevant issues arising in the complaint and analysis of those issues
  • a decision as to how the complaint should be resolved and why, including a particular remedy (if any) to be provided to the complainant.

For non-superannuation complaints, if you choose not to accept AFCA’s determination, you have a right to pursue your claim against the financial firm through the courts. 

Have you ever made a financial services complaint? How did you find the process? Let us know in the comments section below.

Also read: Binding financial agreements

Ben Hocking
Ben Hocking
Ben Hocking is a skilled writer and editor with interests and expertise in politics, government, Centrelink, finance, health, retirement income, superannuation, Wordle and sports.
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