The Australian Financial Complaints Authority (AFCA) has offered to assist in the use of a tough new product intervention power that aims to prevent consumer harm.

The power, given to the Australian Securities and Investments Commission (ASIC), was enacted in April and the regulator is consulting on how it will be used in practice.

AFCA says it is well-placed to support ASIC’s use of the power due to the information it gathers in handling consumer issues.

“There is potential for AFCA to act as a facilitator in informing ASIC of problem areas within the financial services industry through the intelligence we gather in our complaint-handling processes, and systemic issues and serious contravention reporting functions,” CEO David Locke says.

The AFCA submission says further consideration would be required to finalise details of how it could assist, but the additional role would complement its evolving responsibilities.

The external complaints resolution scheme started operating in November last year, bringing several groups into the one-stop shop, and it has been given an expanded remit in the wake of the Hayne royal commission.

The Federal Government announced that a compensation scheme of last resort will be established as part of AFCA and it has been given authority to consider consumer complaints dating back to 2008.

Mr Locke says ASIC’s new power will enhance its ability to act, irrespective of whether a financial firm has complied with legislative or regulatory requirements.

“AFCA strongly welcomes the addition of the product intervention power to ASIC’s regulatory toolkit,” he said.