Australian Financial Complaints Authority's approach to responsible lending complaints

The Australian Financial Complaints Authority ("AFCA") has published a guide outlining the way it assesses responsible lending complaints.

The guide outlines how AFCA:

• decides whether a financial firm has met its responsible lending obligations;
• applies legal principles, industry codes and regulatory guidance when considering these types of complaints;
• determines fair outcomes where the responsible lending obligations were breached; and
• calculates a complainant's loss and assesses benefits to determine fair compensation.

AFCA's assessment process

When assessing whether a financial firm has met the responsible lending obligations, AFCA will focus on whether the credit contract was unsuitable for the complainant. It will consider whether the firm: