Australians in dispute with their bank, insurer, super fund or financial firm have lodged more than 80,000 complaints in the last 12 months, with the Australian Financial Complaints Authority (AFCA) securing $258.6 million in compensation and refunds direct to consumers.
People made 80,546 complaints to AFCA between 1 July 2019 and 30 June 2020. This is a 13.7% increase in monthly complaints compared to the last financial year (FY18/19).
AFCA resolved 78% of cases, with a majority being settled in 60 days or less. 73% of complaints were settled by agreement or in favour of the complainant, with banks being the most complained about financial institution.
Chief Executive Officer and Chief Ombudsman David Locke said most complaints have been about credit, insurance claims, and superannuation.
“One in ten 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 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% of COVID-19 related complaints being about financial hardship.”
He said 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.”
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.”
“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.”
