RELEASE OF THE EXTERNAL DISPUTE RESOLUTION FRAMEWORK SUPPPLEMENTARY FINAL REPORT

The Turnbull Government has released the Supplementary Final Report of the expert panel reviewing external dispute resolution and complaints arrangements in the financial system (Ramsay Review).

The panel, comprising Professor Ian Ramsay (Chair), Ms Julie Abramson and Mr Alan Kirkland, were tasked with reviewing Australia’s external dispute resolution framework to ensure it is effective in resolving disputes between consumers and small businesses and financial institutions.

The Government received the panel’s final report in April this year and accepted all 11 recommendations.

The Government has introduced legislation into Parliament, which has now passed the Senate, to establish the Australian Financial Complaints Authority (AFCA), a one-stop shop external dispute resolution scheme to hear and determine all financial and superannuation disputes. AFCA will replace the Superannuation Complaints Tribunal, the Financial Ombudsman Service and the Credit and Investment Ombudsman. It will operate under significantly higher monetary limits and compensation caps, and will be a flexible scheme, able to respond quickly to the ever-changing financial services landscape.

Earlier this year the Government extended the terms of reference for the Ramsay Review to require the panel to make recommendations on the establishment, merits and potential design of a compensation scheme of last resort and the merits and issues involved in providing access to redress for past disputes in the financial sector.

The Supplementary Final Report of the Ramsay Review has been released on these expanded terms of reference.  

On 30 November, the Turnbull Government announced that it will establish a Royal Commission to investigate allegations of misconduct by Australian banks and other financial services providers. While the Royal Commission will have sweeping powers to look into these important matters, we have also ensured that it will not defer, delay or limit any proposed or announced policy, legislation or regulation that is currently being implemented.

This means that the Royal Commission will not impact on the establishment of AFCA or other important policy initiatives, such as the new Banking Executive Accountability Regime and significant reforms to bolster whistleblower protection regimes.  

However, the Royal Commission will examine many of the issues that have been considered as part of the supplementary Ramsay report and as a result, the Government will defer its consideration of, and response to, the Report until the Royal Commission has concluded.

The Government thanks the Panel for their important work.

The Supplementary Final Report is available on the Treasury website.