AFCA receives record number of complaints in FY19-20

People made 80,546 complaints to AFCA between 1 July 2019 and 30 June 2020, up 13.7 per cent compared with a year earlier, with AFCA successfully resolving 78 per cent of cases in 60 days or less. 

Chief executive and chief ombudsman David Locke explained that most complaints have been 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,” said Mr Locke. 

He revealed that complaints relating to the COVID-19 pandemic were more likely to involve financial difficulty.

“Australian consumers have faced a number of significant challenges this year,” he said. “The pandemic has had a particular impact on Australian households, with 20 per cent of COVID-19 related complaints being about financial hardship.”

However, AFCA saw less complaints relating to COVID-19 than anticipated, due to the proactive response taken by financial firms.

“We commend financial institutions for their quick response to the pandemic. As always, we encourage banks and insurers to maintain open and transparent communication with their customers about the support available to them if they’re experiencing financial difficulty,” said Mr Locke. 

Since the virus was declared a pandemic in March, AFCA has received 4,773 complaints relating to COVID-19. Most of these complaints have been about general insurance claims (1,813) with more than 1,500 of these being travel insurance complaints.
 
The second most thorny issue for consumers was credit with 1,711 complaints, with almost a quarter of these being about a failure to respond to requests for assistance. There were also 791 COVID-19 complaints about superannuation, a majority of which related to early access of super.

“We anticipate seeing more financial difficulty related COVID-19 complaints over the next six months as government support, such as JobKeeper payments are wound back, along with the end of financial firm initiatives such as a ban on rental evictions, and mortgage pausing,” Mr Locke advised. 

“If you think you will experience financial hardship soon, or believe your circumstances will change, we encourage you to contact your bank or a financial counsellor as soon as possible to talk about the options available to you.”