The Australian Financial Complaints Authority (AFCA), the nation’s single external dispute resolution scheme for financial firms founded in 2018 has posted statistics on complaints received during the period July-December 2019. The data shows several firms accounting for the majority of filed complaints with some familiar financial brands also receiving complaints.
Of note is Forex Financial Services, which received 162 complaints in this time period, as well the majority of complaints in the previous reported period of November 2018-June 2019. Traders will be glad to know that since a large number of complaints have been received over the last year, the firm looks to have shut down operations, while another firm, KP International Group Australia has had their license cancelled by the Australian Securities & Investments Commission (ASIC).
Among the other brokers and financial firms that have received customer complaints, the EDR scheme reports that CMC Markets and Plus500 received over 20 complaints each, while popular brands like Pepperstone and IG Markets received fewer complaints. In general, the amount of complaints received is not alarming, but one must consider that the data is presented for the last 6 months of 2019 and not the full year and no details are provided on the resolutions of such cases, which can in some situations require prolonged work on resolutions between the parties.
Considering the costs for brokers associated with filing and resolving complaints at AFCA, and the annual membership fees that are derived in part by complaints received and processed in previous periods, we believe further clarification is needed to determine the full costs to brokers in such matters. Likewise, it is important to know the resolution times for complaints accepted by AFCA to determine the effectiveness of the EDR scheme, when compared to other, independent EDR services available to FX and financial brokers around the world.