Contents

General terms

Financial Firm (FF)

An AFCA member that has met the threshold number of complaints to be included in the comparative reports for the reporting period.

Banking and Finance complaints

Complaints that are classified under the Credit, Deposit Taking or Payment System product lines. Refer to AFCA product classification below for more information.

Received complaints

Complaints received

‘Complaints received’ is the total number of complaints for the member received by AFCA during the reporting period.

Complaint Referral Path

The complaint referral path is the path through which the complaint was referred to the financial firm to review (e.g. IDR or Post-IDR) their complaints. Not all complaints received are referred to the financial firms within a reporting period.

Referral resolution rate

The percentage of complaints closed after being referred by AFCA back to the financial firm compared to those progressed to case management.

This measures the proportion of complaints received that have since closed and is intended to measure the performance of the registration and referral process. The higher the value, the better the result.

Open complaints that have not ‘completed’ the registration and referral process by either closing or progressing are deducted to give a better representation of performance.

The rate will not change over time as complaints close or progress to the next stage of the process. Complaints are attributed to the relevant month in which they either closed at referral or progressed to case management.

The ‘Referral resolution rate’ is calculated using the following formula:

RRR (%) = Total closed in referral statuses / (Complaints closed in referral statuses + Complaints progressed to case management) X 100

Accepted complaints

Progressed to Case Management (complaints accepted)

‘Complaints progressed to case management’ are complaints that progressed from the Registration and Referral stage of the AFCA complaint process and were accepted into AFCA Case Management.

Key issues

The top three issues (by count) identified in the accepted complaints for a given period. These issues were identified by AFCA case workers when working on a case. Issue information can be updated at any time throughout the resolution process.

Proportion of complaints accepted by Key Issue

A measure of the top three issues, as a percentage of all accepted complaints, for a given period.

Financial difficulty complaints (FD)

Financial difficulty is a type of issue used in AFCA complaints to identify where a complainant has reported difficulty in meeting repayments for financial products.

Proportion of FD complaints accepted

A measure of complaints relating to financial difficulty, as a percentage of all accepted complaints, for a given period.

Responsiveness

Non-response at Registration (total non-response)

A complaint is classified as having been a ‘Non-response at Registration’ if:

  • AFCA and the complainant did not receive the initial response requested by the set due date at the Registration and Referral stage
  • it progressed to our Case Management stage
  • there was no change to the progression reason
  • the financial firm’s response did not sufficiently provide their position or supporting documentation.

‘Total Non-response Rate’ is calculated using the following formula:

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Non-response rate

The percentage of complaints that progressed to the Case Management stage without an initial response at the Registration and Referral stage.

Insufficient response rate

The percentage of complaints that progressed to the Case Management stage because the financial firm’s response did not sufficiently provide their position or supporting documentation.

Extension requests

Requests made by the financial firm to AFCA for extensions of time.

Overdue responses

Requests issued by AFCA to the financial firm for overdue information.

Closed complaints

Complaints closed

The number of complaints that were closed during a given period. This includes complaints brought to AFCA before the start of the selected period.

Clearance ratio

A measure of how many complaints were closed out of all complaints received.

This metric reflects AFCA’s ability to close complaints. A Clearance Ratio of less than 100% indicates that AFCA has received more complaints for the member than it has resolved in a given period.

Proportion of complaints closed by AFCA status

The proportion of complaints, broken down by case status, that were closed after progressing to case management in a given period.

Case management stages:

  • Rules review: Complaints referred for review to the AFCA Rules team.
  • Case management level 1 (CM1): The case owner reviews the complaint, contacts the complainant and FF and, where necessary, requests any further information. The case owner may also seek to resolve the complaint by negotiation.
  • Case management level 2 (CM2): Where appropriate, we attempt to resolve the complaint by further negotiation, conciliation, or merits assessment.
  • Preliminary view (PV): We provide our preliminary view in relation to the dispute. This may be in the form of a recommendation or provided verbally by phone.
  • Decision: Complaint has been referred to an AFCA ombudsman where a final determination will be made and communicated to all parties.

Proportion of complaints closed by stream

The proportion of complaints, broken down by complaint stream, that were closed after progressing to case management in a given period. This includes FastTrack, Rules, Standard and Complex.

Conciliation conferences conducted

The number of conciliation conferences that AFCA has conducted relating to a member in a given period. Conciliation is a resolution method used to assist the financial firm and complainant to agree to a proposed resolution.

Conciliation resolution rate

This metric captures the effectiveness of conciliation conferences conducted.

For conciliation conferences conducted via phone, data may take up to a month to appear in the report.

Outcomes of the Resolution Process

Once a complaint is closed, an outcome must be determined. They are:

  • Resolved by agreement
  • In favour of complainant
  • In favour of financial firm
  • Discontinued
  • Assessment
  • Outside AFCA Rules

Resolved by agreement

A complaint is resolved by agreement if the consumer and the financial firm come to a resolution that they are both satisfied with. They can achieve this either by dealing directly with each other or by using AFCA’s resolution methods (such as conciliation and negotiation). A formal AFCA decision is not required in these cases.

In favour of complainant

These complaints were resolved by AFCA issuing either:

  • a Preliminary Assessment, or
  • a Determination

in which some significant issue was decided in the complainant’s favour.

In these circumstances, AFCA might award partial or full monetary compensation or non-monetary compensation. AFCA can also require the financial firm to take some action (such as changing the terms of a loan or other contract). AFCA will seek to remedy the situation by putting the complainant in the position they would have been in if they had not suffered the loss caused by the financial firm.

In favour of financial firm

These complaints were resolved by AFCA issuing either:

  • a Preliminary Assessment, or
  • a Determination

in which no significant issue was decided in the complainant’s favour.

In these circumstances, it is unlikely that the financial firm was required to pay compensation or take any other action. If the financial firm was required to pay any compensation or take any other action, it will have been in relation to some minor issue that was not significant in the context of the whole complaint.

Discontinued

These complaints were discontinued because:

  • the complainant requested that the complaint be withdrawn, or
  • the complainant did not respond to us.

Assessment

These complaints were resolved by AFCA providing an assessment regarding the merits of the complaint (verbally or in writing) at an early stage of the complaint process, that is, before the stages where we provide a Preliminary Assessment or Determination.

For an outcome to be classified as Assessment, the assessment must have been accepted by the complainant and financial firm.

Outside AFCA Rules

AFCA is governed by a set of Rules that outline what type of complaints we can and can’t consider.

The most frequent reason we cannot consider a complaint is because there was no financial service provided to the complainant. In many cases, this is because the complainant has selected the incorrect financial firm to lodge a complaint against. In these situations, we will typically arrange for a new complaint to be lodged against the correct entity.

Where we do not have the power to consider a complaint, we will still endeavour to work with the parties to find a solution where possible.

Product glossary

Credit

Business finance

Product

Definition

Business credit cards

A form of short‐term finance allowing goods and services to be purchased sooner by a business.

Business loans

A loan provided to a business (may be secured or unsecured, fixed or variable interest).

Commercial bills

A document expressing the commitment of a business to repay a short‐term debt at a fixed date in the future.

Hire purchases/leases

Buying goods by instalment payments. The 'hirer' has the use of the goods while paying for them, but does not become the owner until all instalments have been paid.

Letters of credit

A permanent and absolute responsibility by a financial firm to repay the principal and interest of a loan in the event of a default by the borrower.

Lines of credit/overdrafts

A fully functional transaction account that has a credit limit attached to it. The borrower can generally withdraw funds at any time, up to the credit (or facility) limit. (If the credit limit is attached to more than one account, the borrower may only be able to draw up to the account limit on each account.) There is usually no fixed repayment schedule; however, the borrower is usually required to make payments to at least cover the interest and fees on the loan.

Non FF debt / Non-financial product debt

A debt that has been incurred as a result of a non‐financial product. Debts such as telephone, electricity, gas and water bills are non‐financial firm debts.

NB: if the debt is not owed to a AFCA financial firm and does not relate to a financial service, use “Non Rules” instead.

Consumer credit

Product

Definition

Buy now, Pay later

A service where payment is delayed and usually no interest is applied.

Construction loans

Short‐term (usually three years) real estate financing secured by a mortgage on the property being financed. This loan is meant to cover the cost of land development and building construction, and is paid out as needed, as each stage is completed, according to a prearranged schedule, or when some condition is met.

Credit cards

Credit cards are a form of short‐term finance, allowing goods and services to be purchased sooner, even if at greater cost, than if you had to save up for them.

Debt management/credit repair

Services which assists consumers with an incorrect listing on their credit report or negotiates a reduced payment for a debt owed.

Equity releases

Also known as a reverse mortgage or lifetime mortgage. It is a loan to senior homeowners that allows them to access a portion of the equity value in their home. No repayments are required whilst the borrower(s) remains in their property. Interest and fees accrue on the loan and the loan is repayable in full when the last surviving borrower permanently vacates the home or the home is sold.

Hire purchase/leases

Buying goods by instalment payments. The 'hirer' has the use of the goods while paying for them but does not become the owner until all instalments have been paid.

Home loans

The funds a buyer has to borrow (usually from a bank or other financial institution) to purchase a property; generally secured by a registered mortgage to the bank over the property being purchased.

Interest‐free finances

Credit for interest free loans is usually provided by a finance company through the retail outlet. Some of these finance companies provide a credit card as part of the credit contract. If used outside any "interest free" promotion then interest and charges will generally accrue in the same way as other credit cards. But the interest rates for credit cards issued by finance companies are usually higher than those offered by other types of lenders.

Investment property loans

The funds a buyer has to borrow (usually from a bank or other financial institution) to purchase an investment property.

Lines of credit/overdrafts

A line of credit allows you to make the bulk of your purchases or payments through a credit card with an interest free period. You use the credit card for most purchases allowing you to leave the bulk of your wage in the loan until your credit card account is payable. This slightly reduces the balance of the home loan debt for part of the month and therefore slightly reduces the interest payable.

Non FF debt / Non-financial product debt

A debt that has been incurred as a result of a non‐financial product. Debts such as telephone, electricity, gas and water bills are non‐financial firm debts.

NB: if the debt is not owed to a AFCA financial firm and does not related to a financial service, use “Non Rules” instead.

Personal loans

A type of loan available from banks, finance companies and other financial institutions, generally for the purposes such as buying a car, boat or furniture.

Short‐term finance

Short –term finance refers to the act of seeking or finding sources of monetary funds for a period of time of less than one year. For example, project managers may seek short‐term funding for unexpected expenses.

Guarantees

Product

Definition

Bank guarantees

A type of guarantee in which a bank or other lending organisation promises to repay the liabilities of a debtor in the event that the debtor is unable to.

Business guarantees

A guarantee offered by a company or an individual as security for the borrowings of a business.

Consumer guarantees

A guarantee offered by a business or an individual as security for the borrowings of an individual or individuals.

Margin loans

Product

Definition

Margin loans

A type of loan available from various financial institutions, allowing investors to borrow cash against the value of listed shares or units in managed funds.

Deposit taking

Current accounts

Product

Definition

Business transaction accounts

A deposit account used by businesses for everyday transactions.

Foreign currency accounts

A deposit account which holds funds in a foreign currency or currencies.

Mortgage offset accounts

A deposit account where the balance is ‘offset’ (either fully or partially) against a home loan, reducing the amount of interest payable.

Passbook accounts

An account with a passbook attached to it, containing a physical record of all transactions.

Personal transaction accounts

A deposit account used by consumers for everyday transactions.

Savings accounts

Product

Definition

Bank bills

A bank bill is a short‐term money market investment. The investor purchases a bank bill at a discount to its face value. The face value is the amount the investor will receive at the bill’s maturity date. The amount of discount (the difference between the face value and purchase price) represents the return to be earned by holding the bank bill to maturity.

Cash management accounts

A deposit account which pays a reasonable amount of interest on funds deposited without requiring the funds to be deposited for a fixed term.

First home buyer accounts

First home buyer accounts became available from 1 October 2008. Unlike an ordinary savings account or investment, you can only use the funds in this type of account to buy or build a home that you will live in and only after you have saved for at least four financial years. A first home saver account is a way of saving to buy or build your first home in which your savings attract a government contribution.

Online accounts

An account which must be linked to another deposit account for the purpose of making deposits or withdrawals and is generally conducted via the internet or telephone banking.

Term deposits

A deposit account where monies are held for a fixed term and interest accrues at a fixed rate.

Safe custody

Product

Definition

Safe custody

A facility whereby it is possible to arrange for your valuable documents & other possessions to be securely stored inside the vault at a bank branch.

General insurance

Domestic insurance

Product

Definition

Consumer credit insurance*

Consumer credit insurance (or CCI) is insurance that covers you if something happens that affects your capacity to meet the payments on your loan or credit card. CCI can be Life Insurance, General Insurance or a combination.

Home building

A home building insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of destruction of or damage to a home building.

Home contents

A home contents insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of loss of or damage to the contents of a residential building.

Landlords Insurance

A home building insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of destruction of or damage to a rental property (both commercial and residential)

Motor vehicle

A motor vehicle insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of one or more of the following:

(a) loss of, or damage to, a motor vehicle; and

(b) liability for loss of, or damage to, property caused by or resulting from impact of a motor vehicle with some other thing.

Personal and domestic property

A personal and domestic property insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of loss or damage to property that is wholly or mainly used for personal, domestic or household purposes. Property includes any of the following:

(a) moveables

(b) valuables

(c) a caravan or mobile home

(d) an on‐site mobile home

(e) a trailer

(f) a marine pleasure craft

(g) a horse

(h) a domestic pet

(i) a mobile phone

Trust Bond

A Trust Bond is a type of cover for residential tenants, where the beneficiary is the landlord or real estate agent and the tenant is the holder of the trust bond. The tenant pays a premium (normally up front) for the duration of the rental contract, and the insurance company assumes liability for any damages or outstanding rent at the end of the rental contract. While trust bonds are not an insurance product under the Corporations Act, they have similar features to insurance.

The product is being trialled under the Terri Scheer Brand, using Suncorp’s AFSL with the product name “Trustbond”.

Residential strata title

A residential strata title is an insurance contract insuring the body corporate of large apartment block buildings that are wholly occupied for residential or small business purposes.

Sickness and accident*

A sickness and accident insurance product is a contract or part of a contract that has either of the following characteristics:

(a) the contract provides insurance cover (whether the cover is limited or restricted in any way) in respect of the insured person contracting a sickness or disease or a specified sickness or disease or sustaining an injury or a specified injury; and

(b) if the insured person dies as a result of the sickness, disease or injury, the contract provides insurance cover (whether the cover is limited or restricted in any way) in respect of the death.

Ticket insurance

Insurance that provides cover where someone is unable to attend an event (e.g. entertainment, sports) because of unforeseen circumstances such as accident, illness or transport delays. The insurance is often arranged when booking through a ticketing company such as Ticketmaster or Ticketek.

Travel insurance

A travel insurance policy insures you for things like personal injury, illness, loss or theft while you are travelling or any disruption to your travel plans.

Extended warranty

Product

Definition

Brown goods

Extended warranty arrangement under which the customer pays a fee in return for the warranty provider to repair or replace parts or components for light electronic consumer durables (e.g. TVs, radios, CD/DVD players, computers).

Motor vehicles

An extended motor vehicle warranty is an arrangement under which the customer pays a fee in return for the warranty provider, agreeing to repair or replace (or cover the cost of repairing or replacing) parts or components of a vehicle in the event of mechanical breakdown of those parts or components.

White goods

Extended warranty arrangement under which the customer pays a fee in return for the warranty provider to repair or replace parts or components for Heavy consumer durables (e.g. air conditioners, refrigerators, stoves, etc).

Professional indemnity insurance

Product

Definition

Medical indemnity insurance

Medical indemnity insurance protects a medical business and its employees when they are sued for an act, error or omission in relation to professional services.

Other professional indemnity

Professional indemnity insurance protects a business and its employees when they are sued for an act, error or omission in relation to professional services.

Small business/farm insurance

Product

Definition

Commercial vehicle

Insurance that provides cover against theft and accidents for vehicles used for business purposes.

Commercial Property

Insurance that provides cover for commercial/farm buildings, which may include fences.

Computer and electronic breakdown

Insurance that provides cover against computer and other electronic equipment breakdown.

Contractors all risk

Insurance that covers all risks associated normally with a construction project.

The insurance is often issued under the joint names of a contractor and a principal (client). It also usually includes public liability insurance.

Fire or accident damage

Insurance cover provided in the event of fire or accidental damage.

Glass

Insurance cover provided in the event of glass breakage (e.g. shop fronts).

Industrial special risk

Insurance which covers almost all risks and perils which a large industry may face during its operation

Land transit

Insurance that provides indemnity to the owner of goods for the loss or damage sustained by the goods shipped whilst in transit from a place of shipment to a destination.

Livestock

Insurance cover for owners of horses, cattle, sheep, and other useful animals kept or raised on a farm or property.

Loss of profits/business interruption

Insurance cover that is designed to cover a business should something happen that causes the company to be unable to operate.

Machinery breakdowns

Insurance that provides cover for the costs incurred in reinstatement, replacement and/or repair of mechanical and electrical equipment following accidental damage or mechanical breakdown.

Money

Insurance that provides indemnity following the theft or loss of money.

Public liability

Public liability insurance is insurance for claims by third parties (the public) for personal injury or property damage caused by or attributable to the negligence of the insured.

Thefts

Insurance that provides indemnity following an act of theft.

Investments

Derivatives/hedging

Product

Definition

Contracts for difference

A contract between two people that mirrors the situation of trading a security, without actually buying or selling the security. The two parties make a contract that the seller will pay the buyer the difference in price after a certain period of time if the designated security's price increases, and the buyer will in return pay the seller the difference in price if the security's price decreases.

Cryptocurrency

Cryptocurrency, such as Bitcoin and Ethereum, is an internet based virtual currency which is created and stored electronically. It uses strong cryptography to secure transaction records, to control the creation of additional currency, and to verify the transfer of currency ownership. Cryptocurrency units are sometimes called coins or tokens and typically do not exist in physical form (like paper money). It is also typically not issued by a central authority.

Foreign exchange

Cash or other claims (e.g. bank deposits and bonds) on another country, held in the currency of that country.

Forwards

A future commitment whose terms are established now; a contract under which one side will buy and the other sell a specific asset at a set price on a given future date.

Futures

An agreement to buy or sell a standard quantity of a products, such as gold or $US, on a specific future date at an agreed price determined at the time the contract is traded on the futures exchange.

Options

The right to buy or sell shares or securities at a set price and within a set period. The buyer/seller has the right but not the obligation to buy or sell.

Swaps

An arrangement in which two entities lend to each other on different terms.

Managed investments

Product

Definition

Australian equity funds

An Australian equity fund is a fund that invests primarily in Australian stocks, allowing investors to buy into the fund and thus buy a basket of stocks more easily than they could purchase the individual securities.

Cash management accounts

An account that uses a management tool to ensure that sufficient cash is available to meet current and future liabilities, with any surplus being safely invested to generate the maximum income.

Charitable/educational schemes

Funds which are established and are operated for a charitable or educational purpose, such as scholarship funds.

Film schemes

A management investment scheme where:

People are brought together to contribute money to get an interest in the scheme ('interests' in a scheme are a type of 'financial product' and are regulated by the Corporations Act 2001).

The money is pooled together with other investors (often many hundreds or thousands of investors) or used in a common enterprise.

Horse Schemes

Investment schemes centred upon the co‐ownership of a horse for the purpose of financial advantage, such as racing and breeding syndicates.

International equity funds

An international equity fund is an open or closed‐end fund that invests primarily in overseas shares/securities and other assets, allowing investors to buy into the fund and thus buy a basket of stocks more easily than they could purchase the individual securities.

Investor directed portfolio services

An investor directed portfolio service (IDPS) is a service for acquiring and holding investments that involve arrangements for the custody of assets and consolidated reporting. There will generally be a menu of investments opportunities associated with an IDPS. Arrangements typically marketed as master funds and wrap accounts are likely to be an IDPS. An important feature of an IDPS is that the investor makes all the investment decisions.

Managed discretionary accounts

Generally, managed discretionary accounts (MDAs) are arrangements that involve a person (an MDA operator) managing a portfolio of assets for a retail client on an individual basis.

The MDA operator makes discretionary decisions on behalf of the client (does not need to get authority from the client for each transaction) but this is done in accordance with an agreed investment strategy.

Managed strata title schemes

A managed strata title scheme is when an investor in a strata (apartment) unit has a right (by agreement or an understanding with the promoter) to a return which depends, in whole or in part, on the use of other investors' strata units (as opposed to common property). For example, your return depends on an arrangement for pooling income or for fairly allocating tenants.

Mixed asset funds

Multiple managed investments or mixed funds. (So you might have an investment portfolio involving various managed investments).

Mortgage schemes

A managed investment scheme that has most of its non-cash assets invested in mortgage loans.

Primary production schemes

Schemes where the investor is really a "grower" of the primary product (e.g. tea trees, pine trees, paulownia trees, olives, viticulture, beans, coffee etc). The investor/grower usually enters into an agreement with the manager/responsible entity for the scheme to plant, establish and maintain the trees until they are harvested at maturity.

Property funds

A type of collective investment where investors collect their money together and a professional manager operates the scheme, which invests in residential or commercial properties.

Timeshare schemes

A timeshare scheme is a scheme:

in Australia or elsewhere, where participants are entitled to use, occupy or possess, for two or more periods, property to which the scheme relates; and

operates for not less than three years.

Trustee common funds

Funds invested by trustees who are empowered to pool monies in common funds despite the fact that the monies were received from individual trusts.

Real property

Product

Definition

Real property

Land including things that are fixed to land, such as buildings. The buildings may be used for residential purposes or commercial purposes. Investing in real property is a form of investment and may include an investment in things such as a residential home either as a primary residence or as a rental property; an apartment, unit or other strata title interest used for residential purposes; or, a shop, office, factory, unit or other building used for commercial purposes.

Securities

Product

Definition

Bills of exchange

A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a certain sum in money to, or to the order of, a specified person or to the bearer.

Bonds

A bond is a statement of debt and is issued by governments, companies, other entities and individuals in return for cash from lenders and investors.

Debentures

A debenture is one way for a business to raise money from investors. In return for your money, the business (or ‘issuer’ of the debenture) promises to:

pay you interest; and

pay back the money you lend them (or your ‘capital’) on a future date.

Exchange traded funds

A managed fund that is traded on a stock exchange.

Promissory notes

A promissory note is a written promise, free of any conditions, to pay an agreed sum of money to someone at a fixed time in the future. Most commonly they are used to raise short term finance.

Shares

A share is simply a part-ownership of a company. For example, if a company has issued a million shares, and a person buys ten thousand shares in it, then the person owns one per cent of the company.

Warrants

A certificate giving the holder the right to purchase securities at a stipulated price within a specified time span, or in some cases, indefinitely. Warrants are sometimes attached to other securities as an added purchase inducement and may be traded separately after issue. They are similar to call options. Warrants have all the other features of shares‐ entitlement to dividends, tradeable on the share market; price goes up and down depending on the underlying share price.

Superannuation – non-trustee related

Product

Definition

Annuity policy

An annuity policy is an income stream provided by a life insurance company that is declared to be a superannuation policy under the Life Insurance Act . It pays out a guaranteed stream of payments to an individual for a set period of time. It is used as an income stream for retirees.

Approved deposit funds

A fund with particular taxation advantages, designed to receive superannuation benefits that are rolled over from another superannuation fund (e.g. accumulated superannuation benefits paid to someone leaving a job).

Pension

Account based pension

An account-based pension (also called an allocated pension) is one of a number of concessionally taxed products that investors can buy with a lump sum from a superannuation fund, or pay from a self-managed superannuation fund, to give them an income during retirement. An investment account is set up with this money from which they draw a regular income. A minimum payment must be made at least annually. It is also possible to nominate a reversionary pensioner to continue to receive income payments after the member’s death.

Life time pension

A lifetime pension is a type of superannuation pension that is payable for the life of the pensioner and in some cases the life of a reversionary pensioner such as a spouse. Lifetime pensions are sometimes called defined benefit pensions.

Transition to Retirement Pension

A Transition to Retirement Pension (or TRIS) is a form of account-based pension that can be paid to a superannuation fund member even if the member has not yet retired. In addition to the minimum annual pension payment (see Account based Pension), there is a maximum annual payment of 10% of the account balance. Unlike an account-based pension, the investment earnings of a TRIS are not eligible for concessional tax treatment and it is not usually possible for income payments to continue on the death of the pensioner. Instead, if the pensioner dies, the account balance must be paid as a lump sum.

Pooled superannuation trusts

A wholesale superannuation entity in which multiple superannuation trustees contribute superannuation assets and structured as a tax-paid unit trust.

Retirement savings accounts

A special capital guaranteed superannuation account with banks or credit unions that is used to save funds for retirement.

Self-managed superannuation funds

Small superannuation funds where the members are also the trustees (or directors of the corporate trustee). There is a limit on the number of members.

Small APRA fund

A small superannuation fund for members who do not want to be trustees. A professional trustee is instead used.

Superannuation fund

A superannuation fund is a trust-based vehicle where compulsory Superannuation Guarantee (SG) contributions and voluntary contributions can be paid. Superannuation funds are usually divided into three broad categories:

  • Registrable Superannuation Entities (RSEs) that are regulated by the Australian Prudential Regulation Authority (APRA),
  • Self-managed superannuation funds regulated by the Australian Taxation Office (ATO), and
  • Exempt public-sector superannuation schemes providing benefits for government employees or schemes established by Commonwealth, State or Territory law, that are not directly subject to the SIS Act 1993 and APRA regulation.

APRA-regulated RSE licensees are generally classified into four types:

  • Corporate funds – a private superannuation fund that is supported by an employer. Corporate funds are generally only open to people working for a particular employer or corporation.
  • Industry funds – a type of not-for-profit superannuation created for people who work in a particular industry or under a particular industrial aware. Industry funds are often open for anyone to join.
  • Retail funds - a retail fund is a type of superannuation fund that is open to everyone. Retail funds can also have sub-plans that are only open to particular employee groups.
  • Public sector funds - a superannuation fund established for employees of federal and state government departments. They are generally only available to government employees. They may provide higher employee contributions than the statutory minimum.

Life insurance

Income stream risk

Product

Definition

Consumer credit insurance

Usually pays monthly benefits to help pay interest on loans.

Income protection

Income protection insurance pays a monthly benefit where the life insured is unable to work due to injury or illness. Business expenses may be covered separately or form part of the policy for self-employed.

Non-income stream risk

Product

Definition

Annuities

An annuity is an income stream, which is paid at pre‐determined intervals, at a predetermined rate, for either a specific period of time or for the life of the pensioner. Lifetime pensions or annuities provide income payments for the investor’s lifetime and for the lifetime of reversionary beneficiaries (if any).

Endowments

Under endowment assurance policies, the sum assured and any bonuses are paid on the death of the life insured or at the end of a set period, whichever occurs first.

Funeral plans

A type of insurance cover that pays a lump sum on death, usually to cover funeral expenses.

Scholarship funds

A fund to provide money for scholarships, bursaries or prizes.

Term life

Term life insurance pays a death benefit if the life insured dies during the term of the policy (before the policy expires).

See Whole of life for distinction.

Total and permanent disability

Total and permanent disability insurance (TPD) provides a lump sum payment if a person become totally and permanently disabled.

Trauma

Trauma (or critical illness) insurance provides a lump sum benefit if a person is diagnosed with a specified illness or injury. These types of products cover major illnesses or injuries that will impact a person's life and lifestyle.

Whole of life

A life insurance policy guaranteed to stay in force for the duration of the insured’s life, provided premiums are paid.

See Term life for distinction.

Payment systems

Direct transfer

Product

Definition

ATM

A transaction (deposit, withdrawal or balance enquiry) completed using an Automatic Teller Machine.

Bank drafts

A cheque drawn by one bank against funds deposited into its account at another bank, authorising the second bank to make payment to the individual named in the draft. (e.g. a ‐ foreign currency cheque drawn on an overseas bank).

Cheques

A signed order in writing, addressed by a person to a financial institution, requiring the financial institution to pay a sum of money on demand.

Counter transactions

A banking transaction conducted in person, at a branch.

Direct debits

A standing authority provided to a business (usually a third party company, but can also be provided to the financial firm) allowing it to directly debit a nominated account. The direct debit can be linked to an account with a financial institution (e.g. personal transaction account or to a credit card).

EFTPOS

Electronic Funds Transfer at Point of Sale – a way of paying for goods or services using a card or device linked to a bank account, so that the funds are transferred directly from the buyer’s account to the seller’s account.

Electronic banking

Transactions carried out via internet banking and telephone banking.

Foreign currency transfers

Transfer of foreign currency between institutions, pertaining to international financial markets.

Merchant facilities

Facility offered by financial firms to businesses to accept payment in forms other than cash (e.g. EFTPOS, credit cards etc). Different card providers may require different merchant facilities (e.g. AMEX, Diners, Visa and MasterCard).

Telegraphic transfers

An electronic method of payment used to transfer funds between financial institutions. Can be either local (e.g. between two Australian banks) or overseas.

Non-cash

Under the Corporations Act 2001 (Cth), ASIC licenses issuers and distributors of “non-cash payments” facilities. “Non-cash payments” are defined as payments made “otherwise than by the physical delivery of Australian or foreign currency in the form of notes and/or coins”.

 

Product

Definition

Loyalty programs

Loyalty schemes are operated by, or on behalf of, a person (the ‘issuer’) linked to the goods and services (e.g. credit card services, flight services or store goods) they offer or provide. The loyalty scheme is designed to encourage the issuer’s customers to use or spend on the issuer’s goods and services.

Non‐cash systems

A facility through which a person makes non‐cash payments (e.g. PayPal)

Stored value cards

A type of non‐cash system. Stored value facilities are services that allow you to put money into a card that can be used to make purchases for goods and services.

Travellers’ cheques

A pre‐printed, fixed‐amount cheque designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.

Superannuation

Annuity policy

Product

Definition

Pension

Life time pension

A lifetime pension is a type of superannuation pension that is payable for the life of the pensioner and in some cases the life of a reversionary pensioner such as a spouse. Lifetime pensions are sometimes called defined benefit pensions.

Death Benefit

When an annuitant dies, a death benefit may be payable to the deceased’s estate or to a nominated beneficiary, depending on the terms of annuity.

Approved deposit fund

Product

Definition

Pension

Account based pension

An account-based pension (also called an allocated pension) is a concessionally taxed product that members can receive from an approved deposit fund to give them an income during retirement. A minimum payment must be made at least annually. It is also possible to nominate a reversionary pensioner to continue to receive income payments after the member’s death.

Transition to Retirement Pension

A Transition to Retirement Pension (or TRIS) is a form of account-based pension that can be paid to a member even if the member has not yet retired. In addition to the minimum annual pension payment, there is a maximum annual payment of 10% of the account balance. Unlike an account-based pension, the investment earnings of a TRIS are not eligible for concessional tax treatment and it is not usually possible for income payments to continue on the member’s death. Instead, if the member dies, the account balance must be paid as a lump sum.

Death Benefit

When a member of an approved deposit fund dies, the trustee of the fund must pay a death benefit in accordance with the fund’s rules. This might be to the nominated beneficiary (binding) or according to the trustee’s discretion. The death benefit may include an insured component.

Terminal Illness

If a member of an approved deposit fund suffers a ‘terminal medical condition’ under the Superannuation Industry (Supervision) Regulations, the trustee of the fund may pay a terminal illness benefit to the member. The terminal illness benefit may include an insured component where the fund member is ‘terminally ill’ as defined by the policy.

Total & Permanent Disability

When a member of an approved deposit fund becomes Totally and Permanently Disabled (within the meaning of the fund’s rules), the trustee of the fund may pay a TPD benefit to the member. The TPD benefit may include an insured component where the fund member is totally and permanently disabled, as defined by the policy. In order for the trustee to pay the benefit from the fund, the member must be unable to work in any occupation (see condition of release for ‘permanent incapacity’).

Income Protection

Income protection insurance, also known as salary continuance, replaces the income lost through the insured’s inability to work due to injury or illness. The majority of superannuation funds offer some level of income protection cover as an optional extra. Cover will be in the form of a percentage of current income. In order for the trustee to pay the benefit from the fund, the member must also satisfy the condition of release for ‘temporary incapacity’.

Superannuation Account

An account held by a member of an approved deposit fund. A member’s superannuation account can only be paid in cash to the member if the member has satisfied a condition of release but, subject to the rules of the fund, the member can usually request to rollover their account to another approved deposit fund or to a superannuation fund at any time.

Life policy fund

Product

Definition

Death Benefit

When a member of a superannuation fund dies, the trustee of the fund must pay a death benefit in accordance with the fund’s rules. This might be to the nominated beneficiary (binding) or according to the trustee’s discretion. The death benefit may include an insured component.

Terminal Illness

If a member of a superannuation fund suffers a ‘terminal medical condition’ under the Superannuation Industry (Supervision) Regulations, the trustee of the fund may pay a terminal illness benefit to the member. The terminal illness benefit may include an insured component where the fund member is ‘terminally ill’ as defined by the policy.

Total & Permanent Disability

When a member of a superannuation fund becomes Totally and Permanently Disabled (within the meaning of the fund’s rules), the trustee of the fund must pay a TPD benefit to the member. The TPD benefit may include an insured component

where the fund member is totally and permanently disabled, as defined by the policy. In order for the trustee to pay the benefit from the fund, the member must be unable to work in any occupation (see condition of release for ‘permanent incapacity’).

Income Protection

Income protection insurance, also known as salary continuance, replaces the income lost through the insured’s inability to work due to injury or illness. The majority of superannuation funds offer some level of income protection cover as an optional extra. Cover will be in the form of a percentage of current income. In order for the trustee to pay the benefit from the fund, the member must also satisfy the condition of release for ‘temporary incapacity’.

Superannuation Account

An account held by a member of a Superannuation Fund. A member’s superannuation account can only be paid in cash to the member if the member has satisfied a condition of release but, subject to the rules of the fund, the member can usually request to rollover their account to another superannuation fund at any time.

Retirement savings account

Product

Definition

Death Benefit

When the holder of a Retirement Savings Account dies, a death benefit will be paid in accordance with the terms and conditions. This might be to the nominated beneficiary or the holder’s estate. The death benefit may include an insured component.

Terminal Illness

If a holder of a Retirement Savings Account suffers a ‘terminal medical condition’ under the Retirement Savings Account Regulations, a terminal illness benefit may be paid to the holder. The terminal illness benefit may include an insured component where the holder is ‘terminally ill’ as defined by the policy.

Total & Permanent Disability

When a holder of a Retirement Savings Account becomes Totally and Permanently Disabled (within the meaning of the terms and conditions), a TPD benefit may be paid to the holder. The TPD benefit may include an insured component where the holder is totally and permanently disabled, as defined by the policy. In order to pay the benefit, the holder must be unable to work in any occupation (see condition of release for ‘permanent incapacity’).

Income Protection

Income protection insurance, also known as salary continuance, replaces the income lost through the insured’s inability to work due to injury or illness and can be obtained through a Retirement Savings Account. Cover will be in the form of a percentage of current income. In order for the benefit to be paid, the holder must also satisfy the condition of release for ‘temporary incapacity’.

RSA Account

An account held by a holder of a Retirement Savings Account. A holder’s RSA account can only be paid in cash to the holder if the holder has satisfied a condition of release but, subject to the terms and conditions, the holder can usually request to rollover their account to another Retirement Savings Account or a superannuation fund at any time.

Small APRA fund

Product

Definition

Pension

Account based pension

An account-based pension (also called an allocated pension) is a concessionally taxed product that members can receive from a superannuation fund to give them an income during retirement. A minimum payment must be made at least annually. It is also possible to nominate a reversionary pensioner to continue to receive income payments after the member’s death.

Life time pension

A lifetime pension is a type of superannuation pension that is payable for the life of the pensioner and in some cases the life of a reversionary pensioner such as a spouse. Lifetime pensions are sometimes called defined benefit pensions.

Transition to Retirement Pension

A Transition to Retirement Pension (or TRIS) is a form of account-based pension that can be paid to a superannuation fund member even if the member has not yet retired. In addition to the minimum annual pension payment (see Account based Pension), there is a maximum annual payment of 10% of the account balance. Unlike an account-based pension, the investment earnings of a TRIS are not eligible for concessional tax treatment and it is not usually possible for income payments to continue on the death of the pensioner. Instead, if the pensioner dies, the account balance must be paid as a lump sum.

Death Benefit

When a member of a superannuation fund dies, the trustee of the fund must pay a death benefit in accordance with the fund’s rules. This might be to the nominated beneficiary (binding) or according to the trustee’s discretion. The death benefit may include an insured component.

Terminal Illness

If a member of a superannuation fund suffers a ‘terminal medical condition’ under the Superannuation Industry (Supervision) Regulations, the trustee of the fund may pay a terminal illness benefit to the member. The terminal illness benefit may include an insured component where the fund member is ‘terminally ill’ as defined by the policy.

Total & Permanent Disability

When a member of a superannuation fund becomes Totally and Permanently Disabled (within the meaning of the fund’s rules), the trustee of the fund must pay a TPD benefit to the member. The TPD benefit may include an insured component

where the fund member is totally and permanently disabled, as defined by the policy. In order for the trustee to pay the benefit from the fund, the member must be unable to work in any occupation (see condition of release for ‘permanent incapacity’).

Income Protection

Income protection insurance, also known as salary continuance, replaces the income lost through the insured’s inability to work due to injury or illness. Cover will be in the form of a percentage of current income. In order for the trustee to pay the benefit from the fund, the member must also satisfy the condition of release for ‘temporary incapacity’.

Superannuation Account

An account held by a member of a Superannuation Fund. A member’s superannuation account can only be paid in cash to the member if the member has satisfied a condition of release but, subject to the rules of the fund, the member can usually request to rollover their account to another superannuation fund at any time.

Superannuation fund

Product

Definition

Pension

Account based pension

An account-based pension (also called an allocated pension) is a concessionally taxed product that members can receive from a superannuation fund to give them an income during retirement. A minimum payment must be made at least annually. It is also possible to nominate a reversionary pensioner to continue to receive income payments after the member’s death.

Life time pension

A lifetime pension is a type of superannuation pension that is payable for the life of the pensioner and in some cases the life of a reversionary pensioner such as a spouse. Lifetime pensions are sometimes called defined benefit pensions.

Transition to Retirement Pension

A Transition to Retirement Pension (or TRIS) is a form of account-based pension that can be paid to a superannuation fund member even if the member has not yet retired. In addition to the minimum annual pension payment (see Account based Pension), there is a maximum annual payment of 10% of the account balance. Unlike an account-based pension, the investment earnings of a TRIS are not eligible for concessional tax treatment and it is not usually possible for income payments to continue on the death of the pensioner. Instead, if the pensioner dies, the account balance must be paid as a lump sum.

Death Benefit

When a member of a superannuation fund dies, the trustee of the fund must pay a death benefit in accordance with the fund’s rules. This might be to the nominated beneficiary (binding) or according to the trustee’s discretion. The death benefit may include an insured component.

Terminal Illness

If a member of a superannuation fund suffers a ‘terminal medical condition’ under the Superannuation Industry (Supervision) Regulations, the trustee of the fund may pay a terminal illness benefit to the member. The terminal illness benefit may include an insured component where the fund member is ‘terminally ill’ as defined by the policy.

Total & Permanent Disability

When a member of a superannuation fund becomes Totally and Permanently Disabled (within the meaning of the fund’s rules), the trustee of the fund must pay a TPD benefit to the member. The TPD benefit may include an insured component

where the fund member is totally and permanently disabled, as defined by the policy. In order for the trustee to pay the benefit from the fund, the member must be unable to work in any occupation (see condition of release for ‘permanent incapacity’).

Income Protection

Income protection insurance, also known as salary continuance, replaces the income lost through the insured’s inability to work due to injury or illness. The majority of superannuation funds offer some level of income protection cover as an optional extra and some funds offer it automatically. Cover will be in the form of a percentage of current income. In order for the trustee to pay the benefit from the fund, the member must also satisfy the condition of release for ‘temporary incapacity’.

Superannuation Account

An account held by a member of a Superannuation Fund. A member’s superannuation account can only be paid in cash to the member if the member has satisfied a condition of release but, subject to the rules of the fund, the member can usually request to rollover their account to another superannuation fund at any time.

Issue glossary

Advice

Issue

Definition

Failure to act in client’s best interests

Failure to act in the client’s best interests in providing financial advice

Failure to prioritise client’s interests

Failure to prioritise the client’s interests in providing financial advice

Failure to provide advice

The financial firm has not provided advice to the complainant when it should have done so. Eg:

  • no statement of advice given
  • the financial firm did not provide advice about a financial product or service that it was contracted/obliged to

Inappropriate advice

Inappropriate or insufficient financial advice provided. Eg:

  • inappropriate product or investment strategy advice
  • inappropriate client advice
  • general financial advice provided when personal advice was needed

Charges

Issue

Definition

Deductible or excess

The financial firm has incorrectly applied an excess or deductible. Eg:

  • the insurer may have deducted an incorrect excess amount from a claim
  • a broker may apply an excess which is more than the excess applicable to the claim

Break costs

The financial firm has incorrectly charged or calculated a break costs applicable to a fixed interest rate loan.

Incorrect commissions

Commissions incorrectly applied. Eg:

  • the financial firm (or its representative) has charged commissions that were either the wrong amount or were not due to them
  • the broker has charged commissions that were either more than disclosed or were not due to them at all

Incorrect fees/costs

The financial firm has charged the complainant the wrong amount of fees or other costs for the product or service provided. Eg:

  • fees/costs not charged in accordance with disclosed information
  • fees/costs excessive, inappropriate or wrong

NB: if the complaint is about a deductible, excess, commission, interest, premium or fixed interest loan break costs, please use the more specific issue classification as appropriate.

Incorrect interest added

Inappropriate or insufficient financial advice provided. Eg:

  • inappropriate product or investment strategy advice
  • inappropriate client advice
  • general financial advice provided when personal advice was needed

Incorrect premiums

Incorrect premium charged by the financial firm. Eg:

  • the financial firm has charged the complainant the wrong amount of premiums for the insurance provided
  • the broker has charged the client the wrong amount of premiums for the insurance provided

Incorrect tax

Incorrect tax incurred. E.g.

  • an error by the financial firm has resulted in incorrect tax being incurred by the complainant.

No claim bonus

Incorrect application of a no claim bonus or bonus disallowed. Eg:

  • the insurer reduced or removed a no claim bonus discount due to an at fault claim
  • the broker did not obtain a no claim bonus for the client where the client was entitled to one

Consumer Data Rights

Issue

Definition

Incorrect/inappropriate data collection

This issue relates only to an accredited person collecting or attempting to collect solicited or unsolicited CDR data. Currently, an accredited person can only collect CDR data from a data holder, not an accredited data recipient.

  • Collected or attempted to collect the wrong data, or data that was not part of the individual’s consent
  • Collected more data or a longer time period of data than was necessary (data minimisation principle)
  • Attempted to collect CDR data without the individual’s consent
  • Did not destroy unsolicited CDR data collected

Did not notify the individual of the collection of CDR data

Incorrect/inappropriate data use or disclosure

This issue relates to the use and disclosure of CDR data by a data holder, accredited data recipient or designated gateway.

  • CDR data not used in accordance with the purpose consented to by the individual
  • CDR data used beyond what is reasonably needed to provide the goods or services requested by the individual
  • The wrong CDR data is disclosed
  • CDR data disclosed to an unauthorised party
  • CDR data used or disclosed for direct marketing
  • Did not notify the individual of the disclosure of CDR data

Withholding or refusing to disclose data

Incorrect/inappropriate data maintenance

This issue relates to a data holder or accredited data recipient’s obligation to maintain accurate, up to date and complete CDR data.

  • Inaccurate, outdated or incomplete CDR data held
  • Individual not notified when incorrect CDR data is disclosed

Corrected CDR data not sent to the original recipient

Security and Destruction/De-identification

  • This issue relates to an accredited data recipients obligation to protect CDR data from misuse, interference, loss, unauthorised access, modification or disclosure. It also sets out the requirements for the destruction or de-identification of redundant CDR data.
  • Data not destroyed/deidentified upon request or after the individual’s consented purpose is finalised

misuse, interference and loss, as well as unauthorised access, modification and disclosure.

Incorrect/inappropriate data correction

This issue relates to a data holder or accredited data recipient’s obligation to correct CDR data where appropriate and when requested by an individual.

  • Data not corrected upon request
  • Delay in acknowledging or actioning correction request

Charging for correction

Incorrect/inappropriate advice

  • Provided wrong advice for products/purpose

Other suitable products were available but not offered

Other CDR issue

  • Other issues relating to consumer data rights

Credit Reporting

Issue

Definition

Credit enquiry

The financial firm has incorrectly placed a credit enquiry on a credit file

Credit Score

A concern raised by the complainant about the accuracy of their credit score

Default listing

The financial firm has incorrectly placed a default listing on a credit file

Repayment History Information

The financial firm has incorrectly placed repayment history information on a credit file

Other

Credit Reporting complaints not otherwise categorised

Disclosure

Issue

Definition

Fee disclosure

The financial firm did not properly disclose a fee or charge. Eg:

  • the financial firm provided incorrect, insufficient or misleading information about a fee or charge

NB: if the complaint relates to a fixed interest loan break cost use “Fixed interest loan break cost disclosure” instead.

Break costs disclosure

The financial firm did not properly disclose a break cost applicable to a fixed interest rate loan. Eg:

  • the financial firm provided incorrect, insufficient or misleading information about a fixed interest loan break cost

Incorrect product/service information

The financial firm did not disclose the correct information about a financial product or service. Eg:

  • the financial firm provided incorrect financial product terms and conditions to a complainant, such as incorrect product disclosure statement
  • the financial firm provided incorrect information about how an insurance policy, banking or investment product operated.
  • the financial firm did not provide correct account information to a complainant

NB: if the complaint relates to a fee or charge use “Fee disclosure” or “Fixed interest loan break cost disclosure” instead

Insufficient product/service information

The financial firm did not provide adequate information about the terms, conditions, risks or other features of a financial product or service. Eg:

  • the financial firm did not adequately disclose interest rate charges
  • the financial firm did not adequately disclose insurance policy exclusions or excesses
  • the financial firm did not adequately disclose the risk of an investment product
  • the financial firm did not provide required documents in relation to a product or service

NB: if the complaint relates to a fee or charge use “Fee disclosure” or “Fixed interest loan break cost disclosure” instead

Misleading product/service information

The financial firm provided information about a financial product or service that was misleading or misrepresented the features of the product or service. Eg:

  • the financial firm provided information about a banking, insurance or investment product or service that was both inaccurate and misrepresented the product or service or misled the complainant

NB: if the complaint relates to a fee or charge use “Fee disclosure” or “Fixed interest loan break cost disclosure” instead

Financial Difficulty

Issue

Definition

Decline of financial difficulty request

The financial firm declines a request for assistance made on the basis of financial difficulty. Eg:

  • a request for assistance, such as a repayment variation, is declined and no offer is made by the financial firm
  • the financial firm has not provided reasons for its decision to decline a request for assistance

Default notice

The financial firm issues a default notice under s 88 of the NCCP or s 80 of the UCCC when the complainant is in financial difficulty (regardless of whether assistance has been requested).

Default judgment obtained

The financial firm has obtained default judgment but the complainant considers that it should be stayed on the basis of financial difficulty.

Financial firm failure to respond to request for assistance

The financial firm fails to respond to a request for assistance due to financial difficulty. The request may be actual or implied.

Request to suspend enforcement proceedings

The financial firm continues action to recover a debt after a financial difficulty request has been made. Eg:

  • the financial firm continues or commences legal proceedings

the financial firm commences or continues general recovery action, including taking possession of secured property and inappropriate collection activity (including harassment claims after a financial difficulty request)

Financial Firm Decision

Issue

Definition

Application for early super release declined

The financial firm has declined the complainant’s claim for early release of their superannuation.

Appropriate Lending

The provision of unregulated credit (including to small business) in breach of the financial firm’s lending obligations, or without proper assessment of the borrower’s capacity to repay the debt.

Cancellation of policy

The financial firm has cancelled the insurance policy of a complainant. Eg:

  • inappropriate cancellation of an insurance policy
  • policy cancellation without the authority of the complainant

Claim amount

A disputed insurance claim amount. Eg:

  • the financial firm has accepted the complainant’s claim, but for a different amount to that which the complainant believes they are entitled

Death benefit distribution

The financial firm has made a decision about how to distribute or apportion a superannuation death benefit between beneficiaries.

Denial of application or variation request

The financial firm has decided not to provide a particular financial product or service to the complainant, or not to vary the terms of a product or service as requested by the complainant. Eg:

  • the rejection of a credit application
  • the rejection of an application for increased insurance cover
  • the denial of an insurance cover variation to a change of vehicle to one outside underwriting guidelines

NB: see “Financial Difficulty” for the denial of a loan variation request made on the basis of financial difficulty.

Denial of claim

The financial firm has denied the complainant’s claim. Eg:

  • the denial of a claim for insurance benefits
  • a PayPal buyer/seller complaint

NB: if the claim is that a transaction was not authorised, use “Unauthorised transaction”.

Denial of claim – Complainant non-disclosure

An insurance claim is denied on the basis that the complainant provided incorrect answers to underwriting question(s) at policy inception or renewal. Eg:

  • the financial firm has denied a claim alleging that the complainant omitted to disclose relevant personal/medical details, including criminal history, driving convictions or pre-existing medical conditions

Denial of claim – Driving under influence

An insurance claim is denied on the basis that the driver of the insured vehicle was driving under the influence of alcohol or another substance.

Denial of claim – Exclusion/condition

An insurance claim is denied on the basis that loss or damage occurred as the result of an excluded event, or a breach of an insurance policy condition. Eg:

  • damage caused by an event such as a flood and the event is excluded under an insurance policy
  • where a claim on a life insurance policy relates to an excluded medical condition under the policy, such as a pre-existing illness or injury

NB: use the more specific denial of claim classifications where appropriate, eg, “Denial of claim – Driving under influence” or “Denial of claim – complainant non-disclosure”.

Denial of claim – Fraudulent claim

The financial firm denies an insurance claim on the basis of an allegation that the claim is fraudulent.

Denial of claim – No policy or contract

The financial firm denies an insurance claim on the basis that there is no current insurance policy (including where the policy was lapsed or cancelled).

Denial of claim – No proof of loss

The financial firm denies an insurance claim on the basis that the complainant failed to establish that loss has occurred which is covered under the policy, or failure to establish ownership of goods that were lost/damaged.

Family law division of super benefit

The financial firm has incorrectly implemented a family court order regarding a superannuation benefit.

Liability disputed

The complainant denies liability for an account or guarantee. Eg:

  • the complainant believes the financial firm is pursuing the wrong person for a debt associated with a credit facility
  • the complainant believes they are not liable for a debt on the basis that it has been repaid
  • the complainant believes a guarantee is invalid

NB: where the complainant is disputing specific transactions on the basis that they were not authorised (rather than an entire account or guarantee), use “Unauthorised transaction”

Inappropriate debt collection action

Inappropriate debt collection action or harassment. Eg:

  • a breach of the ACCC Debt Collection Guidelines

NB: if the complaint concerns continuation of debt collection action after a request for assistance made on the basis of financial difficulty, use “Request to suspend enforcement proceedings”

Inappropriate margin call notice and/or investment liquidation

The financial firm has inappropriately issued a margin call notice and/or liquidated some or all of the complainant’s investment. Eg;

  • where the complainant believes the loan to valuation ratio has been calculated incorrectly
  • where the complainant believes the timing of the notice or liquidation is incorrect
  • where the notice was sent to the wrong person

Responsible lending

The provision of credit in breach of the financial firm’s responsible lending obligations, or without proper assessment of the borrower’s capacity to meet repayment obligations.

Mortgagee sale

A complaint about the sale of a property held as security for a loan by the mortgagee. Eg:

  • where the complainant believes the financial firm as mortgagee has undersold the security property
  • where the complainant believes the financial firm as mortgagee has delayed in selling the security property

Interpretation of product terms and conditions

The complainant does not agree with the financial firm’s interpretation of the terms and conditions of a product or service. Eg:

  • disagreement about a definition
  • disagreement about the interpretation of another term or condition

NB: if the complaint concerns the denial of an insurance claim use the most appropriate “Denial of claim” classification.

Unconscionable conduct

A statement or action by the financial firm that is so unreasonable or unjust that it is against good conscience. Eg:

  • Not allowing enough time to consider a contract
  • Requiring someone to sign a blank agreement

Unfair contract terms

A contract term that:

  • will cause significant imbalance in the complainant’s rights and obligations under a contract; and
  • is not reasonably necessary to protect the financial firm; and
  • would cause detriment to the complainant.

Instructions

Issue

Definition

Delay

The financial firm followed instructions but not within an agreed or acceptable timeframe. Eg:

  • redemption requests actioned only after the unit price has dropped
  • renewal notices not issued on time
  • insurance cover not arranged on time
  • delay in clearing a cheque
  • loan approval delay
  • settlement delay

Failure to follow instructions/agreement

Failure to follow instructions or to act in accordance with an agreement (written or oral). Eg:

  • breach of contract (written or oral)
  • failure to follow written instructions (eg direct debit authority not followed, payee name on cheque ignored, internet banking instructions not followed)
  • non-redemption following request; failure to sell stock; failure to buy or sell a financial product when requested to do so
  • insurance cover not arranged, including renewals
  • insurance policy not cancelled
  • sum insured not increased or change of vehicle not noted on the contract

Non Rules

Issue

Definition

Non Rules

Issues that do not fall within AFCA’s Rules.

Privacy & Confidentiality

Issue

Definition

Failure / refusal to provide access

Failure to provide access to personal information following a request. Eg:

  • not providing information requested
  • giving invalid reasons for refusing access
  • not responding appropriately to an individual’s access request

Other privacy breaches

Any other breach of privacy. Eg:

  • unauthorised use of personal information
  • inappropriate collection of material
  • direct marketing

Unauthorised information disclosed

Information about a complainant disclosed without authority. Eg:

  • sensitive information shared with an unauthorised third party
  • providing an account balance to a third party
  • when information provided by the client in confidence is forwarded to an insurance company

Service

Issue

Definition

Account administration error

An error in the administration of an account. Eg:

  • An error in the calculation of a superannuation account balance.

Delay in claim handling

The financial firm has delayed actioning or processing a complainant’s claim. Eg:

  • delay in handling an insurance claim

Delay in complaint handling

The financial firm has taken too long to reach a decision regarding the complainant’s IDR complaint. Eg:

  • no response provided within the IDR timeframe of 21 or 45 days

Failure to provide special needs assistance

The financial firm has not met a special need or requirement of the complainant. Eg:

  • failure to provide language assistance/interpreter
  • failure to provide access for people with disability or impairment

Incorrect financial information provided

Incorrect or insufficient information provided about a product or service. Eg:

  • incorrect account balance information provided

Loss of documents / personal property

Loss of client documents or personal property. Eg:

  • safe custody item lost
  • lost title deeds
  • loss of medical information, tax information, bank statement or ownership certificates

Management of complainant details

Inadequate or incorrect recording of client details. Eg:

  • failure to keep up to date contact details
  • documents or statements sent to wrong address

NB: if the error is a breach of privacy, use one of the classifications under “Privacy and Confidentiality”

Service quality

Other service-related issues that do not fit within other Service categories. Eg:

  • staff behaviour
  • other service issues

Technical problems

Issues have arisen with technical facilities supplied by the financial firm. Eg:

  • online trading platform not available
  • online access to accounts not working
  • website or email problems
  • broker software not functioning

Transactions

Issue

Definition

Chargebacks – declined (consumer)

The financial firm has declined a chargeback lodged by a consumer

Chargebacks – delayed (consumer)

The financial firm has delayed actioning a chargeback lodged by a consumer

Chargebacks – merchant

The financial firm has either declined or delayed actioning a chargeback lodged by a merchant (i.e. small business)

Dishonoured transactions

Transactions on a complainant’s account have been dishonoured. Eg:

  • bounced cheques
  • dishonoured direct debits

Incorrect payment

Deposit or withdrawal errors including failure to pay on demand. Eg:

  • malfunctions by ATMs resulting in incorrect cash dispensed
  • over the counter errors
  • lost funds
  • failure to make payment on demand in relation to a passbook, term deposit, bond, bank cheque or bank guarantee
  • wrong amount paid
  • payment sent to wrong person
  • delay in processing an electronic funds transfer
  • overpayment or underpayment of an insurance benefit or investment proceeds

Mistaken internet payment

A payment made to the wrong person via internet banking. Eg:

  • where the sender entered a wrong account number or BSB
  • where an error by the sending or receiving financial firm has resulted in the payment being sent to the wrong account

Unauthorised transaction

Unauthorised transactions performed on a complainant’s account. Eg:

  • unauthorised direct debit
  • forged cheques and withdrawal slips
  • stolen card ATM withdrawals
  • credit card transactions not authorised by the cardholder
  • purchase or sale of investments without written or verbal authority to do so
  • an insurance claim paid to someone other than the insured and/or a refund provided to another party
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