AFCA has announced it is reviewing its Appropriate Lending to Small Business Approach which considers:

• the types of small business complaints it can consider under AFCA’s Rules
• how it assesses if a financial firm’s credit assessment was appropriate
• how it considers industry codes, regulatory guidance and good industry practice in its decision making
• how it determines a fair outcome where a firm has provided an inappropriate loan, and
• how it calculates loss and determines how much compensation should be paid.

AFCA’s Rules define a ‘small business’ as a business (or a group of related bodies corporate) with less than 100 employees. A small business may be a primary producer.

Companies or individuals can operate a small business in their own capacity, or as trustees for family or other trusts. If the complainant does not operate a business, it may still be eligible to bring a complaint under AFCA’s Rules if it is:
• an individual trustee of a trust, or
• the corporate trustee of a Self-Managed Superannuation Fund or a family trust.

AFCA’s decisions seek to reflect what is fair in the circumstances of each complaint. In assessing what is fair, it focusses on concepts such as fair dealing, fair treatment, and fair service.

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