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Glossary of key terms

This is a short glossary of terms relevant to the Comparative Reports. See also the Product Glossary.

Financial Firm

An AFCA member that has met the threshold number of complaints to be included in the comparative reports for the reporting period.

Membership Status

During the comparative reporting period, whether the financial firm maintained a confirmed membership with AFCA.

Primary Business

The main service type offered by the financial firm (e.g. bank or insurer). This field is self-reported.

Business Size

All members of AFCA, except superannuation members, provide us with business size information which is classified depending on the type of member they are.

AFCA uses this data to categorise members within 5 categories:

  • Very Small
  • Small
  • Medium
  • Large
  • Very large

This ensures that the complaint data published for each financial firm can be compared appropriately, taking into account the relevant business size of each firm.

Superannuation business size metric

Currently, the business size of superannuation trustee members is calculated separately to other member types of AFCA.

Superannuation business size is based on the ‘total number of member accounts’ per trustee. Member account information is based on relevant APRA data.

Superannuation business sizeRange
Very SmallFirm has less than 1,000 member accounts.
SmallFirm has 1,000 to 99,999 member accounts.
MediumFirm has 100,000 to 499,999 member accounts
LargeFirm has 500,000 to 999,999 member accounts.
Very LargeFirm has more than 1,000,000 member accounts.

Complaints received

‘Complaints received’ is the total number of complaints received during the comparative reporting period at our Registration and Referral stage. This is only used in the overall table as we use ‘Complaints progressed to case management’ in product-based tables.

Progressed to Case Management

‘Complaints progressed to case management’ are complaints that progressed from the Registration and Referral stage of the AFCA complaint process and were accepted into Case Management for the comparative reporting period.

Complaints closed at Case Management

The number of complaints that were closed during the comparative reporting period. This includes complaints brought to AFCA before the start of this period.

Referral resolution rate

The percentage of complaints closed after being referred by AFCA back to the financial firm.

The comparative reports measure ‘Referral resolution rate’ is calculated using the following formula:

Non-response at Registration

A complaint is classified as having been a ‘Non-response at Registration’ if:

  • AFCA and the complainant did not receive the initial response requested by the set due date at the Registration and Referral stage,
  • it was progressed to our Case Management stage, and
  • there was no change to the progression reason.

Non-response rate

The percentage of complaints that progressed to the Case Management stage without an initial response at the Registration and Referral stage.

‘Non-response rate’ is calculated using the following formula:

Outcomes of the Resolution Process

The Outcomes of the Resolution Process figures give a breakdown of the outcomes of the complaints about a financial firm that were closed in the reporting period.

The different types of outcomes shown in the tables are defined separately in this document. They include:

  • Resolved by agreement
  • In favour of complainant
  • In favour of financial firm
  • Discontinued
  • Assessment
  • Outside AFCA Rules.

For some financial firms in some product-based tables, every outcome category may be blank. This means that no complaints were closed during that reporting period for this financial firm in this product group.

Resolved by agreement

A complaint is resolved by agreement if the consumer and the financial firm come to a resolution that they are both satisfied with. They can achieve this either by dealing directly with each other or by using AFCA’s resolution methods (such as conciliation and negotiation). A formal AFCA decision is not required in these cases.

In favour of complainant

These complaints were resolved by AFCA issuing either:

  • a Preliminary Assessment, or
  • a Determination

in which some significant issue was decided in the complainant’s favour.

In these circumstances, AFCA might award partial or full monetary compensation or non-monetary compensation. AFCA can also require the financial firm to take some action (such as changing the terms of a loan or other contract). AFCA will seek to remedy the situation by putting the complainant in the position they would have been in if they had not suffered the loss caused by the financial firm.

Both Preliminary Assessments and Determinations consider all information provided by both parties, what is fair in the circumstances, and any relevant laws and industry codes of practice.

A Preliminary Assessment may be provided in the form of a written Recommendation or may be provided verbally. For a Preliminary Assessment to resolve a complaint, it must be accepted by both the complainant and financial firm.

A Determination is a written decision issued by an Ombudsman, Adjudicator or Panel. The complainant may accept or reject a Determination. If the complainant accepts a Determination, it becomes binding on the financial firm. If the complainant rejects a Determination, it is not binding, and the complainant can still take legal action regarding the matter.

In favour of financial firm

These complaints were resolved by AFCA issuing either:

  • a Preliminary Assessment, or
  • a Determination

in which no significant issue was decided in the complainant’s favour.

In these circumstances, it is unlikely that the financial firm was required to pay compensation or take any other action. If the financial firm was required to pay any compensation or take any other action, it will have been in relation to some minor issue that was not significant in the context of the whole complaint.

Both Preliminary Assessments and Determinations consider all the information provided by both parties, what is fair in the circumstances, and any relevant laws and industry codes of practice.

A Preliminary Assessment may be provided in the form of a written Recommendation or may be provided verbally. For a Preliminary Assessment to resolve a complaint, it must be accepted by both the complainant and financial firm.

A Determination is a written decision issued by an Ombudsman, Adjudicator or Panel. The complainant may accept or reject a Determination. If the complainant accepts a Determination, it becomes binding on the financial. If the complainant rejects a Determination, it is not binding and the complainant can still take legal action regarding the matter.

Discontinued

These complaints were discontinued because either:

  • the complainant requested that the complaint be withdrawn, or
  • the complainant did not respond to us.

Assessment

These complaints were resolved by AFCA providing an assessment regarding the merits of the complaint (verbally or in writing) at an early stage of the complaint process, that is, before the stages where we provide a Preliminary Assessment or Determination.

For an outcome to be classified as Assessment, the assessment must have been accepted by the complainant and financial firm.

Outside AFCA Rules

AFCA is governed by a set of Rules that outline what type of complaints we can and can’t consider.

The most frequent reason we cannot consider a complaint is because there was no financial service provided to the complainant. In many cases, this is because the complainant has selected the incorrect financial firm to lodge a complaint against. In these situations, we will typically arrange for a new complaint to be lodged against the correct entity.

Where we do not have the power to consider a complaint, we will still endeavour to work with the parties to find a solution where possible.

Compensation Paid

The amount of compensation paid to a complainant is the total monetary outcome recorded when a complaint is closed. This can include:

  • Direct financial loss
  • Indirect financial loss (previously known as consequential loss)
  • Non-financial loss
  • Any award for the complainant’s costs
  • Any income stream amount awarded up to the monthly limit under AFCA’s Rules

AFCA only records the monetary outcome if the information is available.

AFCA Complaint Process Stage Reached (Avg)

AFCA Complaint Process Stage Reached (Avg) is a measure of how far through AFCA’s process (i.e. to what level of escalation) the complaints about this type of product progressed before being resolved. It is not a measure of time taken for AFCA to resolve complaints and some complaints may progress in a non-linear fashion.

It includes complaints that were closed in the comparative reporting period (even if they were brought to AFCA before the start of this period). Complaints that AFCA handled in this period but had not been closed by the end of reporting period are excluded.

The comparative reports measure "AFCA Complaint Process Stage Reached (Avg)" is calculated using the following formula:

The ‘closed status value’ indicates the stage in the process at which the complaint was resolved. The stages at which a complaint may resolve and the corresponding closed status values are:

Closed status valueStageActivity
1Case Management 1
Fast Track Case Management 1
A complaint is allocated to a AFCA staff member who reviews the complaint, makes initial contact with the parties and requests information.
2Case Management 2We seek to resolve a complaint through negotiation, conciliation or providing an assessment.
3Preliminary Assessment
Fast Track Preliminary Assessment
We provide a Preliminary Assessment (which may be in the form of a written Recommendation for non-Fast Track complaints) on what the outcome should be.
4Decision
Fast Track Decision
We issue a Determination which, if accepted by the complainant, is binding on the financial firm.

Here is an example of how the calculation is done:

Financial firm X had 8 complaints closed at either Case Management 1 or Fast Track Case Management 1, and 2 complaints closed at Decision.

Therefore, for financial firm X, the AFCA Complaint Process Stage Reached

Please note that:

  • For some financial firms in some tables, AFCA Complaint Process Stage Reached is blank. This means that no complaints involving this financial firm for this product group were closed during the reporting period.
  • Complaints that we could not consider under our Rules are excluded.

Product glossary

ProductDefinition
Business FinanceA form of credit used for a business, such as credit cards, loans, commercial bills, hire purchase or leases and lines of credit.
Consumer LoansA type of loan available from banks, finance companies and other financial institutions, generally for personal purposes such as buying a car, boat or furniture.
Credit CardsCredit cards are a form of short‐term finance, allowing goods and services to be purchased with the amounts repaid later.
Credit InsuranceA contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of events that may affect the capacity to meet the payments on a loan or credit card.
Deposit taking – Payment systemsPayments or transfer made from a banking account, such as ATM transactions, cheques, direct debits, electronic banking, merchant facilities etc.
Derivatives – Hedging & SecuritiesA contract between two people that mirrors the situation of trading a security, without actually buying or selling the security. The two parties make a contract that the seller will pay the buyer the difference in price after a certain period of time if the designated security's price increases, and the buyer will, in return, pay the seller the difference in price if the security's price decreases. Foreign exchange Cash or other claims (for example, bank deposits and bonds) on another country, held in the currency of that country. We only have jurisdiction to consider a complaint if the product is governed by Australian law. Forwards A future commitment that has terms established now; such as a contract under which one side will buy and the other sell a specific asset at a set price on a given future date. Futures An agreement to buy or sell a standard quantity of a product, such as gold or $US, on a specific future date at an agreed price determined at the time the contract is traded on the futures exchange. Options The right to buy or sell shares or securities at a set price and within a set period. The buyer/seller has the right, but not the obligation to buy or sell. Swaps An arrangement in which two entities lend to each other on different terms.
Extended WarrantiesCustomer pays a fee in return for the warranty provider to repair or replace parts or components of a type of goods.
Home Building InsuranceA contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of destruction of or damage to a home building.
Home Contents InsuranceA contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of loss of or damage to the contents of a residential building.
Housing FinanceThe funds a buyer borrows (usually from a bank or other financial institution) to purchase a property.
Life InsuranceA contract or part of a contract that provides a form of benefit (whether or not the cover is limited or restricted in any way) if the insured is unable to work due to injury or dies during the term of the policy.
Managed InvestmentsA type of fund where people have contributed money for an interest in the scheme, this includes Australian equity funds, Charitable/educational schemes, horse schemes, international equity funds, mortgage schemes etc.
Margin LoansA type of loan available from various financial institutions, allowing investors to borrow cash against the value of listed shares or units in managed funds.
Medical IndemnityMedical indemnity insurance protects a medical business and its employees when they are sued for an act, error or omission in relation to professional services.
Motor Vehicle InsuranceA contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of one or more of the following: (a) loss of, or damage to, a motor vehicle; and (b) liability for loss of, or damage to, property caused by or resulting from impact of a motor vehicle with some other thing.
Motor Vehicle Insurance – Uninsured third partyA contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect to loss of, or damage to, a motor vehicle by a third party who doesn’t have motor vehicle insurance.
Personal and Domestic Property InsuranceA contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of loss or damage to property that is wholly or mainly used for personal, domestic or household purposes.
Professional Indemnity InsuranceProfessional indemnity insurance protects a business and its employees when they are sued for an act, error or omission in relation to professional services.
Real PropertyLand including things that are fixed to land, such as buildings, which may be used for residential or commercial purposes. Investing in real property is a form of investment and may include a primary residence or as a rental property; an apartment, unit or other strata title interest used for residential purposes; or, a shop, office, factory, or other building used for commercial purposes.
Sickness & Accident InsuranceA contract or part of a contract that has either of the following characteristics: (a) the contract provides insurance cover (whether the cover is limited or restricted in any way) in respect of the insured person contracting a sickness or disease or a specified sickness or disease or sustaining an injury or a specified injury; and (b) if the insured person dies as a result of the sickness, disease or injury, the contract provides insurance cover (whether the cover is limited or restricted in any way) in respect of the death.
Superannuation – Account AdministrationAn account held by a member of a superannuation fund.
Superannuation – Death benefitsWhen a member of a superannuation fund dies, the trustee of the fund must pay a death benefit in accordance with the fund’s rules. This might be to the nominated beneficiary (binding) or according to the trustee’s discretion. The death benefit may include an insured component.
Superannuation – Group Life InsuranceLife insurance provided as a group policy purchased by the trustee of a superannuation fund for the benefit of fund members. Cover is not tailored to a particular fund member’s circumstances.
Superannuation – Non-Trustee RelatedComplaints about self-managed superannuation funds, financial advice relating to superannuation that has not been provided by a superannuation trustee, or other investment products held outside superannuation, that are not classed as superannuation complaints and are considered under our investments and advice jurisdiction.
Superannuation – PensionsAccount based pension An account-based pension (also called an allocated pension) is one of a number of concessionally taxed products that investors can buy with a lump sum from a superannuation fund, or pay from a self-managed superannuation fund, to give them an income during retirement. Life time pension A lifetime pension is a type of superannuation pension that is payable for the life of the pensioner and in some cases the life of a reversionary pensioner such as a spouse. Transition to Retirement Pension A Transition to Retirement Pension (or TRIS) is a form of account-based pension that can be paid to a superannuation fund member even if the member has not yet retired.
Timeshare SchemeA timeshare scheme is a scheme where participants are entitled to use, occupy or possess, for two or more periods, property to which the scheme relates and operates for not less than three years.
Strata Title SchemeA strata title scheme is when an investor in a strata (apartment) unit has a right to a return which depends, in whole or in part, on the use of other investors' strata units (as opposed to common property).
Traditional Trustee ServicesTraditional trustee company services include: Estate management Administering or managing a trust, deceased estate or other estate of an individual (e.g. in the capacity of trustee, executor or guardian). Estate planning Preparation of a will, trust instrument, power of attorney or an agency arrangement. Common trusts Establishing and operating common funds. This include trusts established for a specific purpose or designated beneficiaries.
Travel InsuranceA contract that provides insurance cover (whether or not the cover is limited or restricted in any way) during travel generally in respect to personal injury, illness, loss, theft or disruptions to travel plans.