The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has encouraged small businesses impacted by financial misconduct as far back as January 1, 2008, to lodge a complaint with the Australian Financial Complaints Authority (AFCA).
It has been said that previously the AFCA has only taken back complaints going back six years, so according to Ms Carnell, “this is a positive step forward for small businesses”.
“Small businesses could be awarded up to $1 million in compensation if their claim is successful, and the maximum compensation for primary producers is $2 million,” added Ms Carnell.
Making a complaint
From July 1, eligible small businesses will have a one-year window to apply to AFCA regarding complaints dating back to January 1, 2008.
But the process is said to be “very simple”, as explained by Ms Carnell. “[It] involves clicking the yellow ‘make a complaint’ button on the AFCA website.”
The AFCA will refer the complaint back to the financial firm to resolve, and if the financial firm is unable to resolve the legacy complaint satisfactorily, AFCA will begin investigating from October 1, 2019.
Eligibility to apply
A small business is eligible to apply if the complaint relates to loans under $5 million if the submission is about a financial entity that was a member of AFCA at the time of the complaint and if the small business has not already had their case heard by the Financial Ombudsman or a court.
“It is unfortunate that AFCA is bound by the $5 million limit as we know of a range of cases where the small business loan was over this amount, and those businesses have nowhere to go – no access to justice,” Ms Carnell said.