The new Australian Financial Complaints Authority (AFCA) will take over the work of three external dispute resolution schemes and be able to consider claims of higher value when it comes into being in November, 2018.
AFCA will replace the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal.
They hear disputes involving banking, credit, insurance, investment and superannuation. Members of these industries pay fees that fund the schemes.
Industry members of FOS and the CIO will have to retain those memberships for 12 minutes after AFCA opens its doors, so existing matters can be processed.
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The insurer HIH went broke in 2001 but the fall-out from the group collapse continues with a recent court decision in favour of investors.
The NSW Supreme Court has awarded damages to investors who bought shares in HIH when the share price was inflated by misleading information released by the company.
The shareholders were able to prove “indirect causation” or that they had suffered loss even though they did not rely on an overstated profit figure when buying their shares.
An analysis by Damian Clancy and Paul Bannon of legal firm Colin Biggers & Paisley says the decision sets a precedent and is significant for shareholder class actions.
“So long as a shareholder can prove that a corporation’s misleading or deceptive conduct (or material omission) artificially inflated the price of that corporation’s securities, the shareholder may be entitled to recover the loss and damage suffered by reason of that fact, even if the shareholder did not rely upon the relevant conduct,” they say.
The Federal Government faces calls to regulate property investment advisors in the same way as financial advisors following an exposé of land banking scams.
Many Australians have invested in land developments that will prove to be worthless, having been enticed by high-pressure sales tactics and misled into thinking they are buying land that will soon jump in value.
The Senate Economic References Committee has called for tighter controls on property investment advisors, saying they should be regulated by the Corporations Act.
Consumer advocates have long been concerned that debt management firms charge people for services they can access for free.
Consumers suffering financial hardship are being charged a variety of fees by firms that promise to help restructure personal debt and offer no refund if they fail.
The fees are high and often opaque, according to an investigation started by the Australian Securities and Regulation Commission (ASIC) following complaints by consumer advocates, banks, lawyers and ombudsmen schemes.
The pot of money in a self-managed super fund (SMSF) is a too big a temptation for some when they’re under financial stress.
Case law is building, as the tax office gets tougher on people who breach the strict rules on how superannuation may be managed and invested.
The Australian Taxation Office (ATO) is winding up SMSFs, taking trustees to court and seeking a range of orders.