The Australian Financial Complaints Authority has unveiled draft rules to more than double its scam-related compensation cap to A$1.26 million from A$631,500, effective March 31, 2027. The four-week consultation addresses complaints involving banks, telecoms, and digital platforms under the new Scams Prevention Framework. The proposed framework allows AFCA to join multiple regulated entities into a single complaint and apportion liability between them, targeting the entire scam chain from advertisement placement through fund transfers. This marks a significant shift from current practice where only 1.3 percent of AFCA complaints involved additional joined firms in fiscal 2026. The cap applies once per scam regardless of participant count, and complainants cannot artificially reduce claims to meet the threshold. Banks and other SPF-regulated financial firms will face these new Scam Rules, while other disputes fall under renamed Financial Firm Rules. The move comes as ASIC removed over 19,400 online scams in fiscal 2026.
FXnCO Insight
Financial institutions should immediately review internal scam prevention protocols and assess potential liability exposure under multi-party complaint scenarios ahead of the March 2027 implementation deadline.
Source: Finance Magnates