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Financial complaints up by 13.7%

— 1 minute read

Australian consumers have lodged 80,546 complaints in the last 12 months with the financial complaints authority, a 13.7 per cent increase year-on-year.

AFCA reported it had secured $258.6 million in compensation and refunds for consumers in financial year 19/20. 

Banks were the most complained about institution, being linked to 28,411 claims. 

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Meanwhile superannuation funds, trustees and advisers were the fourth most complained about financial organisation, with 4,732 complaints.

Almost a 10th (9 per cent) of all complaints were about super while 6 per cent were about investments. Credit was the product with the most complaints, with 43 per cent.

The top complaint for super, with 1,260 claims was a delay in claim handling, while for investments it was misleading product or service information (757). 

The body had resolved 78 per cent of cases, with 73 per cent being settled by agreement or in favour of the complainant. 

Almost a fifth of AFCA licensee members (19 per cent) saw a complaint lodged against them during the year.

The government authority said it is investigating into 92 systemic issues, after it identified 37 total potential serious contraventions and other breaches during the year.

Chief executive and chief ombudsman David Locke said most complaints were about credit, insurance claims and superannuation. 

“One in 10 complaints also related to financial difficulty – where a consumer was unable to make repayments on loans due to unforeseen circumstances or over-commitment,” Mr Locke said.

Since the virus was declared a pandemic in March, AFCA received 4,773 related complaints, mostly about general insurance claims (1,813) and more than 1,500 being travel insurance complaints.

Credit was the second most thorny issue, giving 1,1711 complaints, with almost a quarter being about a failure to respond to requests for assistance.

There were also 791, or 16 per cent of the COVID-19 complaints, about superannuation, the majority of which were related to the early access scheme.

Mr Locke added complaints relating to the COVID-19 pandemic were more likely to involve financial difficulty, but AFCA had seen less related complaints than anticipated because firms had been proactive.

“Australian consumers have faced a number of significant challenges this year,” Mr Locke said.

“The pandemic has had a particular impact on Australian households, with 20 per cent of [COVID-19-related] complaints being about financial hardship.”

But the complaints body expects more financial difficulty-related complaints to come during the next six months as government support such as JobKeeper payments is wound back.

 

Financial complaints up by 13.7%
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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