Login
ISCOVER
The financial complaints body has adjusted its monetary limits for SME finance complaints including the maximum size of a credit facility.
The Australian Financial Complaints Authority (AFCA) has updated monetary limits for complaints, including increasing the maximum size of a credit facility it can consider a complaint about.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
The changes, which came into effect on 1 January 2021, apply to all complaints received from that date.
The new monetary limits include the maximum value of a claim for compensation AFCA can consider, the maximum size of a credit facility AFCA can consider a complaint about, and the maximum amount AFCA can award a consumer or small-to-medium enterprise (SME) for complaints about banking and finance, general insurance, life insurance, and investments and advice.
Superannuation complaints are not affected.
On or after 1 January 2021, for claims arising from a credit facility provided to a small business or primary producer by a borrower of a small business loan, the compensation amount limit per claim has increased from $1 million to $1.085 million.
For claims arising from a credit facility provided to a small business or primary producer by a borrower of a primary producer loan, the compensation amount limit per claim has increased from $2 million to $2.170 million.
For claims arising from a credit facility provided to a small business or primary producer by a guarantor to set aside a guarantee supported by security over other security for a small business loan, the limit per claim has increased from $1 million to $1.085 million, and it has increased from $2 million to $2.170 million for a primary producer loan.
For all of these claims, the credit facility must not exceed $5.425 million, as per the monetary restriction on AFCA’s jurisdiction.
For claims arising from a credit facility provided to someone other than a small business or primary producer by a borrower, the limit per claim has increased from $500,000 to $542,000.
For claims arising from a credit facility provided to someone other than a small business or primary producer by a guarantor to set aside a guarantee supported by security over other security, the limit per claim has also increased from $500,000 to $542,000.
For both these types of claims, the amount claimed by the complainant must not exceed $1.065 million.
The changes are set out in AFCA’s rules, which require AFCA to update its monetary limits on 1 January 2021, and then every three years thereafter.
As per the rules, the previous monetary limits have been adjusted based on the male total average weekly earnings for the three-year period up to 30 September 2020.
[Related: Complaints extension to end on 1 November]
JOIN THE DISCUSSION