Paid representatives continue to cause problems for the financial ombudsman service, with the Australian Financial Complaints Authority reporting that it refused to consider more than 200 complaints last financial year because the consumers’ paid representatives were not acting in good faith.

AFCA chief executive David Locke said there were 20 representatives involved and most of the of cases involved a few firms.

Speaking at an AFCA member forum yesterday, Locke said AFCA’s position is that a consumer is entitled to support if they feel they need it, even though the complaints process is designed to work without representatives.

“But because paid representatives are frequent users of our service we expect a high standard from them,” Locke said.

If we see that they are bringing complaints without merit or dragging things out to increase their fees we will use our discretion to refuse to consider the matter. In those cases we approach the complainant directly to assist them.”

The government acted on long-standing complaints about the activities of credit repair companies, debt management companies and debtor representatives when it regulated the sector this year,

Since July, businesses offering “credit repair” and “debt negotiation” carried out in relation to a consumer credit contract, and where a consumer is required to pay for the service, have been required to hold an Australian credit licence and meet ongoing compliance obligations (including joining AFCA).

Regulated debt management assistance activities include helping a consumer apply for a change to a credit contract, apply for postponement of enforcement proceedings, helping make a complaint or claim against a credit provider and helping a consumer apply for a change to information collected by a credit reporting body.

Locke said membership of AFCA imposed an obligation of representatives to engage fairly with consumers and financial institutions, giving the ombudsman more power to enforce its standards.

He said AFCA has worked on its processes so that it can identify complaints without merit more quickly.