Complaints to AFCA soar as consumers and small business take aim at banks
Over 60 per cent of the complaints received by AFCA in its first six months of operations were related to the banks, with credit issues at the top of the ladder.
The Australian Financial Complaints Authority (AFCA) has received over 35,000 complaints in its first six months of operation, over 35 per cent more than the combined average of the predecessor schemes.
A total of 61 per cent of the complaints were related to banks, followed by 25 per cent insurance complaints and 10 per cent superannuation. Sixty per cent of complaints have already been resolved, with 74 per cent resolving in favour of the complainant or by agreement.
AFCA Chief Ombudsman and CEO David Locke said the large number of complaints highlighted the important role AFCA plays in rebuilding customer trust in the Australian financial services sector.
“AFCA stands firmly on the side of fairness and a key part of our role is increasing transparency in the financial sector,” Mr Locke said.
“We have published this report so that Australians can see which financial products and services receive the most complaints and how they are being handled by the financial firms.”
Banks received the most complaints of all financial institutions (12,305), followed by general insurers (6,839) and credit providers (5,447).
The most complained about financial products were credit cards (5,191), followed by home loans (2,921) and personal loans (2,704).
AFCA also revealed that within the reviewed six months, there have been 3,819 complainants in financial difficulty compared with 2,074 under the Financial Services Ombudsman (FOS) in 2018.
Based on the current volume of complaints, AFCA now anticipates that it will receive 80,000 complaints in its first year – a 25 per cent increase on its initial forecast.
Small business complaints double
According to the complaints authority, small business complaints have doubled with a $5 million compensation bill in its first six months.
In total, AFCA reported receiving 2,133 complaints from small businesses, compared with 1,020 received by FOS over the same period.
Under the AFCA rules, a small business is defined as an organisation with less than 100 employees (an increase from 20 employees under predecessor schemes). The monetary and compensation limits for small business complaints have also seen a substantial increase from $323,500 to $1 million, and primary producers have a compensation cap of $2 million.