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AFCA to provide clarity on CSLR complaints

The Australian Financial Complaints Authority (AFCA) has committed to providing clarity on a particular area in the forthcoming compensation scheme of last resort (CSLR) legislation.

With the legislation set to be debated in the Parliament in the coming weeks, the financial services ombudsman has acknowledged that the current proposed CSLR treats complaints about losses from a sale, distribution and operation of managed investment schemes and financial products and the provision of financial advice differently and said it intends to provide clarification for the advice sector.

“AFCA already ensures that complaints brought against financial firms are categorised appropriately and, where our rules permit, brought against the correct party,” a statement released on Thursday read.

“Similarly, AFCA must make a fair apportionment of liability where compensation is awarded in claims against more than one financial firm.

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“We are committed, however, to ensuring all parties are clear about which financial firm is responsible for responding to a particular type of complaint and where the responsibility may lie for specific conduct.”

AFCA will release a fact sheet following consultation with relevant stakeholders, including those in the advice industry.

It comes after consumer advocacy group CHOICE again called out the government for the delay in introducing the CSLR scheme after first committing to it in February 2019.

“Justice delayed is justice denied,” CHOICE banking policy adviser Patrick Veyret said.

“Over 1,300 people have had their complaints and compensation award[s] paused until the government passes the scheme.

“People have lost their entire life savings and are stuck in limbo. For many, compensation is the difference between living a secure retirement and facing a life on the aged pension in the insecure private rental market.”

A new survey conducted by CHOICE found overwhelming support for the reforms, with 81 per cent of the Australian respondents agreeing that victims of finance investment schemes should receive compensation and 73 per cent saying they support a compensation scheme for victims.

AFCA to provide clarity on CSLR complaints
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Neil Griffiths

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.

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