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With one day left for affected brokers to appeal AFCA pre-expulsion notices, ASIC has confirmed to The Adviser what the next steps would be if their AFCA membership is cancelled.
Last week, many brokers reported receiving pre-expulsion notice emails from the chief ombudsman and chief executive of the Australian Financial Complaints Authority (AFCA), David Locke, warning them that they may be expelled from the body due to “unpaid invoices”.
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Several brokers contacted The Adviser following receipt of these emails to highlight that they had already paid these invoices and received renewed AFCA membership certificates, voicing concern as to the impacts that this notice would have on their credit licences.
AFCA’s board of directors will meet on Thursday (11 November) to consider expelling these members from AFCA.
What happens if a member is expelled?
The Adviser reached out to the Australian Securities and Investments Commission (ASIC) to understand what the next steps would be should brokers be expelled from AFCA.
A spokesperson for ASIC told The Adviser that while AFCA’s membership and fee arrangements are “an administrative matter for the scheme”, they confirmed that AFCA membership is a requirement for credit licensees and credit representatives under the NCCP and anyone breaching that would be reported to ASIC.
However, the pre-expulsion notice does not have any effect on the person’s licence or credit representative authorisation, they said.
The ASIC spokesperson told The Adviser: “If notified that a person’s AFCA membership may be cancelled, ASIC may consider whether it is appropriate to take any further action in the circumstances of the licensee or credit representative that is affected.”
They suggested that remedial steps would be sought before any further action would be taken.
According to ASIC, this could include “contacting the licensee or credit representative to seek compliance with their obligations, e.g. to request that payment be made to AFCA or membership renewed if it has already been cancelled”.
If the licensee or representative does not comply and no longer holds AFCA membership, then this would result in action being taken.
The spokesperson explained: “For credit licensees – if the licensee no longer holds AFCA membership it will breach the general conduct obligation in s47 [section 47 of the NCCP], which is a civil penalty provision.
“There is no automatic effect on the person’s credit license, but their licence could be suspended or cancelled (s55 of the National Credit Act). The licence can only be suspended or cancelled after the licensee has an opportunity to appear at a hearing and make submissions.
“For credit representatives – if the representative no longer holds AFCA membership, their authorisation from a credit licensee will cease to have effect by operation of s64(4) or s65(5) of the National Credit Act.
“In these circumstances, the person would need to be re-authorised following renewal of their membership (and could not engage in credit activities until their membership is renewed).”
One day left to contact AFCA
AFCA has advised brokers who have made a payment but received a pre-expulsion email to contact AFCA by email at
Those who have not yet paid their invoices should “urgently contact” AFCA’s accounts team on
Payment will result in the withdrawal of the motion to expel, it added.
Several aggregators and association group heads have been engaging with the complaints authority to seek clarity on pre-expulsion notices given the distress caused for those concerned and the potential consequences of being expelled as a member of AFCA.
The chief executive of the Mortgage and Finance Association of Australia (MFAA), Mike Felton, told The Adviser: “Where brokers have received such notices, we recommend that they contact AFCA immediately – and certainly prior to 11 November – to ensure that AFCA has appropriate contact details on file or to provide evidence of payment.
“If the broker is disputing the account or experiencing hardship for any reason, then this should be brought to AFCA’s attention immediately so that it can be addressed or an arrangement can be entered into.”
[Related: Deadline for AFCA expulsion appeals looms]
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