Keeping finance fair: AFCA’s new small biz ombudsman prepares for royal commission compensation claims

Geoff Browne is preparing for a big year as the Australian Financial Complaints Authority’s (AFCA) first lead small business ombudsman.

The former Victorian small business commissioner put feet under desk only a week ago but is already preparing to field an influx of compo claims as the fallout from the banking royal commission continues.

“I see my role as the champion of small-business issues within AFCA,” Browne tells SmartCompany in his first interview since landing the job.

“It means flying the flag whenever I can.”

Equipped with an expanded small-business remit covering 97% of all Australian companies and a new directive from the federal government to review complaints dating back to 2008, there’s plenty of work to be done.

But after decades of poor behaviour in the financial services sector, compensation is near the top of the list.

From July 1, AFCA will open a 12-month compensation program for legacy financial complaints, enabling aggrieved small-business owners to be heard, and possibly paid out.

However, with an expanded remit covering those with up to 100 employees and credit facilities of up to $5 million, AFCA is encouraging businesses who failed to qualify for complaints previously to try again.

“The objective is to try and come to a resolution which is fair and reasonable in all circumstances,” Browne says.

Successful complaints could bag businesses up to $1 million ($2 million for primary producers), although restoring trust between small businesses and the financial services sector will require more than bags of money.

“The royal commission has really shone a light on conduct in the financial services sector,” Browne says.

“We can expect, I think, improved customer service across the board coming out of that.”

While not a regulator, AFCA’s new role as a revitalised complaints body with a dedicated small-business desk means it will play an important role in helping to heal the divide between the small businesses and financial services companies.

Healing the divide

That work appears to have already begun, with businesses flocking to the new body since it opened for business last November.

AFCA is receiving an average of over 400 complaints a month from businesses, more than double the amount under predecessor schemes such as the Financial Services Ombudsman.

With resolutions already underway, Browne puts the influx down to a number of factors, including the ongoing investigation into Viewble Media and the banking royal commission.

“It’s highlighting the importance of AFCA really putting a lot more focus on small-business complaints,” he says.

Browne is quick to stress his independence though, noting AFCA is designed as an impartial complaints body tasked with executing its role under ASIC’s regulatory watch.

That means Browne’s role is very different from that of the Australian Small and Family Enterprise Ombudsman.

“As lead ombudsman, I’ll be making determinations on some of the more complex matters that don’t settle and I need to be independent to do that,” Browne explains.

“That doesn’t mean I can’t get out and about and advocate to small businesses about what we do.

“I’m not saying come to us, we’ll look after you hell or high water, but I’ll be highlighting the role we can play for small businesses.”

Browne has history fielding small-business complaints, as Victoria’s small business commissioner between 2011-16, he dealt with various commercial disputes between commercial landlords and tenants.

Prior to that role he was the deputy director at Consumer Affairs Victoria and has also run his own small business.

Getting proactive

Initially, Browne’s focus will involve plenty of external engagement, Browne says, including consultation with small-business networks, advisors and associations.

Beyond making determinations on complaints, Browne also hopes to work with businesses to understand the nature of common disputes and how they can be avoided to begin with.

“What I really want to know is what the top five causes of small-business complaints are and use that to be proactive,” he says.

While AFCA isn’t a regulator like ASIC, it will play an important role in holding the financial services sector, including the big banks, to account in the coming years.

While the banking royal commission fell short of recommending a broad overhaul to the 2019 Banking Code of Practice, which comes into effect on July 1, a crackdown on enforcement is already underway.

ASIC will be responsible for policing certain “enforceable code provisions” under the new code and will be given new powers to do so in the coming months.

Browne says AFCA is already in discussion with ASIC regarding the code but explained the complaints body will be less a code cop and more an avenue for mediation and redress.

NOW READ: “Life or death for small business”: Financial complaints authority to appoint dedicated ombudsman for SMEs

NOW READ: Small businesses could receive $1 million in compensation for financial disputes as AFCA opens its doors