What Is AFCA and When Can a Borrower Contact Them?

Have you raised a problem with a lender but feel it has not been properly addressed? You may be able to take your complaint to the Australian Financial Complaints Authority, commonly known as AFCA.

AFCA provides a free and independent way for eligible consumers and small businesses to resolve complaints involving financial firms. For you as a borrower, this can include disputes about loans, repayments, fees, financial hardship, responsible lending, credit reporting or debt collection.

In most cases, your first step is to complain directly to the financial firm. You can generally approach AFCA if you are dissatisfied with the response or the applicable internal dispute resolution timeframe has passed without the matter being resolved.

What Is AFCA?

AFCA stands for the Australian Financial Complaints Authority.

It is Australia’s external dispute resolution service for complaints involving financial firms that are members of the AFCA scheme.

AFCA can consider eligible complaints involving areas such as:

• Credit, finance and loans.
• Banking and payments.
• Insurance.
• Investments and financial advice.
• Superannuation.

Its service is independent of the financial firm and free for consumers.

AFCA does not lend money and does not act as an advocate for either side. Its role is to consider eligible complaints impartially and help consumers and financial firms resolve disputes.

When Can You Contact AFCA About a Lender?

You can generally contact AFCA after you have raised your complaint directly with the financial firm and the issue remains unresolved.

For example, you may consider approaching AFCA when:

• The financial firm has not responded within the applicable timeframe.
• Your complaint has been rejected.
• You disagree with the proposed resolution.
• The financial firm has not done what it agreed to do.
• You believe your complaint was not properly considered.
• A request for financial hardship assistance has not been appropriately addressed.

Financial firms covered by the relevant requirements must have an internal dispute resolution process.

For many standard complaints, the maximum internal dispute resolution timeframe is generally 30 calendar days. Different requirements can apply to particular complaints. For example, certain credit complaints involving hardship notices or default notices can be subject to 21-day requirements.

The precise timeframe can depend on the type of complaint and the circumstances, so you should check the information provided by the financial firm or obtain independent advice when timing is important.

When an internal dispute resolution response is required, it should generally explain the decision and tell you about your right to approach AFCA if you remain dissatisfied.

You do not have to wait indefinitely if the applicable complaint-handling timeframe has passed and the issue remains unresolved.

Do You Have to Complain to Your Lender First?

In most cases, you should raise the problem directly with the financial firm first.

Clearly explain:

• What happened.
• Why you believe there is a problem.
• What outcome you are seeking.
• What information or documents support your position.

Sometimes a phone call, email or support request may be enough to resolve a straightforward problem.

If that does not resolve the issue, you can make a formal complaint through the financial firm’s internal dispute resolution process.

Moneysmart recommends making a formal complaint in writing and including the word “complaint”, your contact details, a clear description of the issue, the outcome you are seeking and copies of relevant supporting documents.

Keep the original documents and retain a copy of everything you submit.

If you approach AFCA before the financial firm has had a reasonable opportunity to address your complaint, AFCA may provide the firm with an opportunity to resolve the matter through its internal process.

What Types of Loan Complaints Can AFCA Consider?

AFCA can consider a broad range of eligible complaints involving credit, finance and loans.

Financial Hardship Assistance

If you are having difficulty making your repayments, contact your financial firm as early as you can.

You may be able to complain to AFCA if you have requested financial hardship assistance and believe the financial firm has:

• Failed to respond.
• Declined your request without properly considering it.
• Failed to appropriately assess your circumstances.
• Continued certain recovery action after you asked for hardship assistance.
• Otherwise handled your request unfairly.

AFCA specifically identifies complaints involving financial firms declining or failing to respond to requests to vary repayments because of financial hardship as matters it may be able to consider.

A hardship arrangement is not automatic. The assistance available will depend on your circumstances, the credit contract and the financial firm’s assessment.

If you have a loan with us and are having difficulty making a scheduled repayment, we encourage you to contact us as early as possible. We can discuss your circumstances and the options that may be available.

Responsible Lending Concerns

You may also be able to complain if you believe a regulated consumer loan should not have been provided because it was unsuitable for you at the time.

Depending on the applicable law and credit product, issues may include whether the credit provider:

• Made reasonable inquiries about your financial situation.
• Took reasonable steps to verify relevant financial information.
• Considered your requirements and objectives.
• Properly assessed whether the credit contract was unsuitable.

A later change in your financial circumstances does not, by itself, establish that responsible lending obligations were breached.

AFCA will consider the circumstances of the complaint, the available evidence and the law applying to the credit contract.

At Sunshine Loans, we are required to make reasonable inquiries about your requirements, objectives and financial situation, take reasonable steps to verify your financial situation and assess whether a proposed credit contract is unsuitable for you.

Disputed Fees, Interest or Loan Balances

You may have grounds to complain if you believe a financial firm has:

• Charged a fee that was not permitted.
• Calculated interest incorrectly.
• Failed to record a repayment.
• Provided an incorrect payout figure.
• Continued charging an amount after a debt was repaid.
• Provided inconsistent information about your balance.

Before escalating the matter, you can ask for an itemised statement or written explanation.

That may help establish whether the issue is a processing error, a misunderstanding or a substantive dispute.

Direct Debit and Repayment Disputes

AFCA may also be relevant when your complaint involves issues such as:

• A repayment being deducted on an incorrect date.
• An unauthorised or duplicated debit.
• An agreed repayment arrangement not being followed.
• A payment being taken after an authority was cancelled.
• A payment being incorrectly recorded as missed.

Documents such as bank statements, receipts, emails and copies of repayment arrangements can help establish what happened.

Credit Reporting and Default Listings

You may be able to complain if you believe incorrect information has been provided to a credit reporting body or an inaccurate listing has not been corrected.

Your first step should usually be to ask the relevant credit provider or credit reporting body to investigate and correct the information.

Moneysmart advises that if you cannot reach an agreement with a credit provider about an incorrect listing, you can contact AFCA for free and independent dispute resolution.

Debt Collection Conduct

You may also be able to complain about inappropriate debt collection activity involving a financial firm.

For example, a complaint could concern:

• Harassment or unreasonable contact.
• Misleading statements about a debt.
• Overbearing behaviour.
• Inappropriate disclosure of information.
• Conduct you believe is intimidating or unfair.

Debt collection itself is legal, and creditors are entitled to seek repayment of money that is owed. However, debt collectors must comply with laws and guidelines governing their conduct.

Moneysmart recommends contacting AFCA if unacceptable behaviour connected with a financial service provider continues after you have raised the issue.

Threats of violence or physical force should be reported to police.

How Do You Make a Complaint to AFCA?

The process generally involves four main steps.

1. Complain to the Financial Firm

Start with the financial firm’s internal dispute resolution process.

Clearly identify your communication as a complaint and explain what you believe has gone wrong and what you would like done to resolve the issue.

2. Collect Relevant Documents

Depending on your complaint, useful documents might include:

• Your loan contract.
• Account statements.
• Bank statements.
• Repayment records.
• Emails and letters.
• Relevant chat transcripts.
• Notices from the financial firm.
• Hardship requests.
• Credit reports.
• Notes of telephone conversations.
• The financial firm’s complaint response.

You do not need to send every document you have. Focus on information that is relevant to the dispute and keep copies of everything you provide.

3. Lodge Your AFCA Complaint

You can lodge a complaint through AFCA or call AFCA on 1800 931 678.

AFCA also provides accessibility and language support.

Your complaint should clearly explain:

• Which financial firm is involved.
• What happened.
• When it happened.
• What you have already done to resolve the issue.
• How the issue affected you.
• What outcome you believe would be fair.

4. Participate in AFCA’s Process

AFCA will consider whether the complaint falls within its jurisdiction.

Depending on the case, the process may involve giving the financial firm a further opportunity to resolve the matter, negotiations between the parties, conciliation, an assessment or a formal decision.

Making a complaint does not guarantee that AFCA will agree with your position or provide the particular outcome you request.

Are There Time Limits for Contacting AFCA?

Yes. AFCA complaints are subject to time limits, so it is important not to delay unnecessarily.

For most complaints, AFCA says you generally need to complain before the earlier of:

• Six years after you first became aware, or reasonably should have become aware, that you suffered the loss you are complaining about.
• Two years after receiving an internal dispute resolution response from the financial firm, when you received one before lodging your AFCA complaint.

Different rules can apply to some products and complaint types.

AFCA may extend a time limit when it considers special circumstances apply, but you should not assume that an extension will be available.

A practical approach is to raise your concern with the financial firm as soon as you identify the problem and approach AFCA promptly if you cannot resolve it.

Is AFCA the Same as ASIC?

No. AFCA and the Australian Securities and Investments Commission, or ASIC, have different roles.

AFCA provides external dispute resolution for eligible individual complaints involving consumers, small businesses and financial firms.

ASIC is Australia’s corporate, markets, financial services and consumer credit regulator. It administers and enforces relevant laws and regulates businesses operating within its jurisdiction.

Reporting suspected misconduct to ASIC does not generally provide a process for resolving your individual complaint or obtaining compensation.

Similarly, making an AFCA complaint is not a substitute for contacting police when you believe criminal conduct or an immediate threat is involved.

Can You Contact AFCA About Sunshine Loans?

Yes.

If you have a complaint or dispute with us, we ask you to contact us first through our internal dispute resolution process so that we have an opportunity to investigate and respond.

Our current Credit Guide provides the details for contacting our Internal Dispute Resolution Manager. Our complaints email address is:

complaints@sunshineloans.com.au

If we have not resolved your complaint to your satisfaction, you can lodge an eligible complaint with AFCA.

AFCA is independent of us, and its complaint resolution service is free for consumers.

Our current Credit Guide lists AFCA’s contact details as:

• Phone: 1800 931 678
• Postal address: GPO Box 3, Melbourne VIC 3001

Making a complaint to us does not prevent you from asking us for financial hardship assistance.

If you are having difficulty making a scheduled repayment, please contact us as early as possible so that we can discuss your circumstances and the options that may be available.

Tips for Preparing an Effective Complaint

Try to keep your explanation clear, factual and focused.

A complaint does not have to be lengthy to explain the issue effectively.

You may find it helpful to:

• Explain what happened and when.
• Identify the decision, transaction or conduct you are disputing.
• Explain what you have already done to resolve the issue.
• Provide the most relevant evidence.
• Explain how the issue affected you.
• Clearly state the outcome you are requesting.

Specific dates, transaction amounts and written communications can be more useful than broad statements without supporting information.

Free assistance may also be available through financial counsellors, community legal centres or specialist consumer legal services.

Frequently Asked Questions

Does It Cost Money to Complaint to AFCA?

No. AFCA’s complaint resolution service is free for consumers.

You generally do not need to pay a lawyer or representative to lodge a complaint. You may also be able to access free financial counselling or legal assistance if you need additional support.

Can I Contact AFCA Before the Financial Firm Responds?

You can approach AFCA, but the financial firm will generally need to have an opportunity to address the complaint through internal dispute resolution.

When the applicable response timeframe has passed and your complaint remains unresolved, you do not have to wait indefinitely for a response.

Can AFCA Force a Lender to Cancel a Debt?

AFCA considers each eligible complaint according to its circumstances, the applicable law and its rules.

Depending on the complaint, remedies available to AFCA can include requiring a financial firm to pay money, forgive or vary a debt, or take certain other action.

However, making a complaint does not mean your debt will automatically be reduced, varied or cancelled.

Can AFCA Help if I Cannot Afford My Repayments?

AFCA may be able to consider a complaint about how a financial firm handled a request for financial hardship assistance.

Your first step should generally be to contact the financial firm, explain your circumstances and ask what assistance may be available.

If you have a loan with us, contact us early if you are struggling with your repayments. We can discuss your situation and the options that may be available to you.

Will Contacting AFCA Affect My Credit Score?

Making a complaint to AFCA is not, by itself, the same as missing a repayment or having adverse credit information recorded.

However, making a complaint does not mean you should assume that every obligation under your credit contract has automatically stopped.

If repayments or debt recovery are part of your dispute, speak to the financial firm and consider obtaining independent financial or legal advice about what you should do while the complaint is being considered.

Understand Your Complaint Options

You have the right to raise concerns about a financial product or service and ask the financial firm involved to investigate them.

Start by using its internal dispute resolution process, provide the relevant information and clearly explain the outcome you are seeking.

If you have a complaint about us, you can review our Credit Guide for our current complaint contact details and information about escalating an unresolved complaint to AFCA.

If your concern relates to repayment difficulty, please contact us early so that we can discuss your individual circumstances and possible options.

If you are considering borrowing from us, take the time to review our eligibility requirements, costs and repayment terms before deciding whether a loan is appropriate for your circumstances.

The information provided in this blog is for general informational purposes only and does not constitute financial advice. It is not tailored to the specific circumstances of any individual. Before acting on the information, you should consider whether it is appropriate for you, having regard to your objectives, financial situation and needs.