More power for new financial complaints authority

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.

Continue reading

Cash in decline as payments go online

When did you last write a cheque? Probably not for a long time, and if you are in your twenties you possibly have never owned a chequebook. Cheques now account for only 1.2% of all non-cash transactions in Australia.

Cash use is also falling as more Australians switch to electronic payments, although the folding stuff is still the most popular way to pay.

Withdrawals from ATMs dropped 6.6% in the 2016 financial year, with about $700 million withdrawn, compared with $750 million in 2014.

Continue reading

Government earns $4.5 billion from bank guarantee

Death_to_Stock_Photography_NYC_Skyline_4Remember the Commonwealth Government bank guarantee?

Implemented in November 2008 at the height of panic during the global financial crisis, the guarantee gave the Australian financial system a much-needed injection of confidence by enabling banks to raise funds.

The scheme ended late last year. No claims had been made and the Government had earned $4.5 billion in fees.

The fears of 2008, when major companies and banks around the world were failing, are recalled in a study by Carl Schwartz and Nicholas Tan of the Reserve Bank of Australia.

Continue reading