AFCA highlights record surge in financial complaints
AFCA highlights record surge in financial complaints | Insurance Business Australia
Insurance News
AFCA highlights record surge in financial complaints
Increase driven by scams and insurance woes
Insurance News
By
Roxanne Libatique
The Australian Financial Complaints Authority (AFCA) has reported a 9% rise in complaints for the 2023-24 financial year, totalling a record 105,454 cases.
This follows a substantial 34% increase the previous year, underscoring ongoing challenges in the financial industry.
AFCA urges financial firms to address rise in complaints
Chief Ombudsman David Locke (pictured) commented on the continuing high volume of complaints, suggesting that financial firms could do more to resolve or prevent these issues.
“While we haven’t seen the scale of increase we experienced a year ago, these record numbers are still too high,” he said.
He emphasised the need for financial institutions to improve their internal complaint resolution processes and preventive measures.
“We are disappointed we haven’t seen a reduction. Our view is that firms could be resolving more complaints themselves, or preventing them in the first place,” he said. “We continue to take steps to be able to keep up with the increasing demand for our service, but it’s in everyone’s interests that rising complaints are tackled at the source.”
Major contributors to increase in financial complaints
The data snapshot from AFCA indicated that scams and comprehensive motor vehicle insurance issues were major contributors to the increase.
Banking and finance complaints rose by 11%, reaching 59,636, while general insurance complaints grew by 4% to 29,096 as of June 30.
Scam-related complaints saw a significant 81% increase, totalling 10,951, with an average of 913 cases per month, up from 504 the previous year. This trend was particularly noticeable in personal transaction accounts, which became the most frequently complained-about product. Unauthorised transactions were the most common issue reported.
Decrease in scam-related financial complaints
Locke noted a slight decrease in scam-related complaints toward the year’s end, possibly due to recent government and industry initiatives aimed at addressing scams.
“We saw scam-related complaints dip a little towards the end of the year, possibly reflecting recent government and industry efforts to prevent and address scams,” Locke said. “Our hope is that this improvement continues in the coming year.”
Emerging reports of sophisticated scams targeting the superannuation sector were also highlighted.
Insurance complaints in Australia for 2023-24 financial year
In the general insurance category, complaints reached a record high for the second consecutive year, although the rate of increase was lower than the previous year’s 50% rise.
Complaints about comprehensive motor vehicle insurance rose by 21%, surpassing home building cover as the most complained-about insurance product. Delays in claim processing were a common issue, accounting for a significant portion of these complaints.
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