The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has encouraged eligible small businesses impacted by financial misconduct as far back as 1 January 2008, to lodge a complaint with the Australian Financial Complaints Authority (AFCA).
From 1 July, eligible small businesses will only have a one year window to apply to AFCA regarding complaints dating back to 1 January 2008.
“This is a positive step forward for small businesses who have fallen victim to financial misconduct, as AFCA previously only took complaints going back six years,” Ms Carnell said. “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.”
Small businesses that have a complaint to raise would only need to click on the yellow “Make a complaint” button on the AFCA website to initiate the process.
A small business is eligible to apply if:
“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. “These businesses don’t have the resources to take financial misconduct to court and they deserve justice too.”
AFCA will refer the complaint back to the financial firm to resolve and if the financial firm is unable to satisfactorily resolve a legacy complaint, AFCA will begin investigating from 1 October 2019.
Before small businesses submit their complaint they are encouraged to:
“This will go some way to providing access to justice and redress to many small businesses, but we will continue to put pressure on the government to adopt Ramsay’s supplementary report on a scheme for small businesses with complaints relating to loans over $5 million that includes options such as an independent forum to hear past disputes or government supported legal funding,” Ms Carnell said.