Compensation Scheme of Last Resort
Starting in April 2024 the Compensation Scheme of Last Resort (the Scheme) will commence. The Scheme is designed to protect individuals and businesses when a financial firm is unable to pay an AFCA Recommendation or Determination. The Scheme will pay up to $150,000 to eligible complainants who have received an AFCA determination awarding compensation in relation to complaints.
Starting in April 2024 the Compensation Scheme of Last Resort (the Scheme) will commence. The Scheme is designed to protect individuals and businesses when a financial firm is unable to pay an AFCA Recommendation or Determination. The Scheme will pay up to $150,000 to eligible complainants who have received an AFCA determination awarding compensation in relation to complaints.
The Scheme’s primary objective is to ensure that affected parties are not left without any form of compensation when other means of redress are unavailable. The Scheme typically covers a wide range of financial services, including banking, insurance, investments, and pensions. Eligibility criteria may vary depending on the jurisdiction, but generally will include:
1. Personal financial advice provided to retail clients on relevant financial products;
2. Dealing in securities for retail clients (but not issuing securities);
3. Providing credit (where a financial firm provides funds);
4. Arranging credit (where someone like a mortgage or finance broker arranges funds).
The Scheme will be funded through various means, such as levies imposed on financial institutions or contributions from the industry. These funds are then managed by an independent body or agency responsible for administering the Scheme which will process claims.
FD Legal are assisting many clients seeking to recover compensation from the Scheme. If you have an unpaid AFCA Recommendation or Determination and require assistance lodging your claim with the Scheme, please contact FD Legal on 1300 433 533.
