Australia's newly-established financial services dispute resolution system expects to play an important role in the wake of the Royal Commission into the sector's misconduct.
Australian Financial Complaints Authority chair Helen Coonan said the one-stop-shop for consumers and small businesses "will play an important role in restoring trust in Australia's financial institutions in the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry."
"We will influence reform in the financial services sector by raising standards and improving internal practices to reduce and resolve disputes," Coonan said.
Treasurer Josh Frydenberg said Australians will be spared "the expense and inconvenience associated with taking financial complaints to court."
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"This new one-stop shop represents a new era for financial dispute resolution, delivering free, fast and binding services for all financial complaints, whether they be related to banks, credit providers, insurance companies or superannuation funds," he said.
"AFCA will have significantly higher monetary limits and compensation caps than were available under the Financial Ombudsman Service (FOS) and Credit and Investments Ombudsman (CIO)."
It will be able to hear consumer complaints where the value of the dispute is less than $1 million and will be able to award compensation of up to $500,000. This will be almost double the exiting limits of FOS and CIO, Frydenberg added.
A small business will be able to have their complaint heard where it relates to a credit facility of less than $5 million and will be eligible for compensation of up to $1 million.
This will be almost triple the existing limits of FOS and CIO. In the case of a small business primary production dispute, AFCA will be able to award compensation of up to $2 million.
AFCA will retain an unlimited monetary jurisdiction for superannuation complaints. It is also replacing the Superannuation Complaints Tribunal (SCT).