The AFCA Board has indefinitely pushed back upcoming deadlines over lost superannuation funds. (Source: AFCA/Getty)
The Board of the country’s financial complaints ombudsman has decided to push through a significant change, meaning workers who had retirement savings in two collapsed funds will have more time to lodge an official complaint. It comes as authorities are still waiting for thousands of victims to come forward and lodge a case.
The Australian Financial Complaints Authority (AFCA), will indefinitely extend an upcoming deadline which was about to see a number of now insolvent financial firms involved in the collapsed funds lose their AFCA membership. And that would have closed the door for compensation claims for many impacted workers.
In a statement provided to Yahoo Finance, the CEO of the national ombudsman, David Locke, said it was a long considered process to make the change as “the full extent of consumer harm continues to emerge”.
“The AFCA Board has decided that no insolvent firm known to be involved in the collapse of the Shield and First Guardian Master Funds will be expelled from AFCA at this time,” he said.
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There are still more than 9,000 workers who lost money in the dramatic collapse of the two funds and who have still not lodged a complaint to seek compensation. In total, some 12,000 Australians lost more than $1 billion across the two investment funds.
“This decision ensures access to AFCA remains open for all potentially impacted investors – regardless of which firm they dealt with – while the full extent of consumer harm continues to emerge,” Locke said.
“It would not be fair to close off access to dispute resolution while there remains a significant group of investors who may not yet be aware of their loss, or of their right to lodge a complaint.”
The Board has now removed previously extended membership end dates for the financial advice firms United Global Capital Pty Ltd and Next Generation Advice Pty Ltd which were due to lose membership at the end of March and on April 18 this year.
Instead, the liquidated firms will have their memberships cease on a future date which has not yet been fixed by the AFCA Board.
Under its specific compensation scheme, Australians can only lodge a complaint about a business that is a current member of AFCA.
Companies that have been forced to shut down have one to two years before their AFCA membership expires, therefore shortening the time frame for affected customers to lodge a complaint.
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AFCA made the official announcement of the change on Tuesday afternoon. The move was earlier flagged by lead ombudsman Shail Singh and shared in a Facebook group for victims of the collapsed funds.
The news was unanimously welcomed by those in the group, most of whom are still waiting for their own complaint to be handled and worked through by the ombudsman.
“Thank you AFCA and all involved, it means a lot during this very stressful time losing our future retirement savings,” one person wrote.
“You’re making a real difference to the victims life and giving some ‘hope’ back,” another said.
Group administrator Melinda Kee previously told Yahoo Finance the upcoming passage of those AFCA deadlines would have been a “bloodbath” when people realised they had lost a chance at recourse and restitution.
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