AFCA Pauses AU$267 Million in Customer Claims of Two Insolvent FX Brokers

The Australian Financial Complaints Authority (AFCA) revealed on Friday that it had paused the complaints of 44 financial firms as they entered into insolvency. Out of them, there are two insolvent firms that were foreign exchange dealers.

“The complaints have had to be paused because of the firms’ insolvency,” AFCA stated.

This updated figure was until June 1, 2022, when the agency was handling a total of 2,447 open complaints.

The total claim of customers in these insolvent financial firms is estimated to be almost AU$376.5 million. The two forex dealers that the agency received the maximum number of complaints against also accounted for the maximum claim, which totalled at more than AU$266.8 million.

Additionally, the agency revealed that it had received 1,162 complaints against the two forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term dealers followed by another 525 against four funeral insurance providers and 272 against six managed investment scheme providers.

Other business types which the AFCA received complaints against, and now under the insolvency proceedings, are financial advisors, derivatives dealers, corporate advisors and securities dealers.

“Claim amounts and outcome amounts are estimates only and may be subject to change for a number of reasons, including further validation,” the agency added.

FX Complaints on the Top

The AFCA is an Aussie body that provides an external dispute resolution scheme for the financial service providers in the country. It was established in late 2018, replacing three other dispute resolution agencies, and operates as a non-profit.

Though the AFCA did not reveal the names of the insolvent companies, it was already handling a few high-profile cases. It continued to take complaints of customer claims of the now collapsed ForexCT until mid-2021, a broker that faced a hefty fine of AU$20 million.

Meanwhile, complaints against forex brokers mostly remained at the top of its list. Over the years, it has received complaints even against some of the big industry names like Plus500, CMC Markets and IG Group.