AFCA is an external complaints resolution scheme which resolves complaints about financial firms.
AFCA can consider complaints made about credit, finance, insurance, banking deposits, investments financial advice and superannuation however it has rules that govern the types of complaints that can be considered and those that cannot. For example, AFCA will not consider complaints about the level of a fee charged unless fees were incorrectly calculated or charged, or they were not in line with information disclosed by the financial firm.
AFCA may only consider complaints made by an eligible person about a financial firm that is an AFCA Member at the time of the complaint. In most cases, AFCA's decisions are binding on a financial firm if the complainant accepts AFCA’s decision.
Before February 2019, AFCA (and the earlier schemes which effectively became AFCA) would not deal with complaints against an insolvent financial firm, because an insolvent firm would be unable to pay any compensation determined by AFCA, (or AFCA’s fees).
In February 2019, the Government announced that it would be establishing a compensation scheme of last resort (Compensation Scheme) which “will operate as a last resort mechanism to pay out compensation owed to consumers and small businesses that receive a court or tribunal decision in their favour or a determination from AFCA, but are unable to get the compensation owed by the financial firm — for example, because the firm has become insolvent”.
Since February 2019, in anticipation of the establishment of the Compensation Scheme, AFCA had been accepting and dealing with complaints against insolvent financial firms. On 14 April 2020, AFCA announced a pause on handling complaints against insolvent financial firms.
AFCA stated that it has temporarily stopped processing these complaints as it acknowledges that the COVID-19 pandemic has become the key priority and focus for the Government, and as a result, it is unclear what the impact will be on the establishment of the Compensation Scheme. 
AFCA will continue to accept future complaints about insolvent financial firms but will hold the complaints over until there is more clarity about the Compensation Scheme. 
AFCA has stated it is concerned about putting consumers through the whole complaint resolution process, if the consumer still might not have any chance of getting compensation. https://www.afca.org.au/news/latest-news/afca-pauses-complaints-against-insolvent-financial-firms
Date of article - May 2020
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