The Australian Financial Complaints Authority (AFCA) has announced that Australians made 105,454 complaints to the ombudsman service in 2023–24, which represents a 9 per cent increase over the previous year.
Chief ombudsman David Locke expressed disappointment at the increase, though noted it was a considerably smaller increase than the 34 per cent jump in the 2022–23 financial year.
“While we haven’t seen the scale of increase we experienced a year ago, these record numbers are still too high,” Locke said.
“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.
“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.”
The data that AFCA released is a preliminary snapshot, with the full data set to be included in its annual review.
The data showed scams were a key driver, coupled with a surge in complaints about comprehensive motor vehicle insurance that contributed to record complaints in the banking and finance and general insurance sectors.
Banking and finance complaints rose 11 per cent to 59,636 and general insurance complaints 4 per cent to 29,096, as of 30 June.
Scam-related complaints rose a massive 81 per cent to 10,951 in 2023–24, averaging 913 a month compared with 504 a month the previous financial year.
AFCA said this led to personal transaction accounts being the most complained about product overall with 16,365, while transactions that customers considered unauthorised were the most common issue in complaints to AFCA during the period.
“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.”
The chief ombudsman also noted that there has been instances of “sophisticated scam activity” in the superannuation sector.
“We urge super fund trustees to review the steps they have in place to protect members from fraud,” he said.
“The fact that scam and unauthorised transaction complaints in super are still low means there’s a window of opportunity for trustees to act so we don’t experience the sorts of issues seen elsewhere.”
In May, the Australian Securities and Investments Commission (ASIC) issued a warning following a review that identified some cold calling operators using high-pressure sales tactics to lure consumers with unsolicited calls after obtaining their personal information from third-party data brokers or by using online clickbait.
At the time, ASIC said these have led to generation and referral arrangements with a small subset of financial advisers who typically recommend consumers switch into super products, incurring significant fees.
“Some of these cold calling operators are pressuring consumers in critical retirement-saving years to move their savings when it is not in their best interests, putting them at risk of having less super as a result of inappropriate investments, fees and charges,” ASIC commissioner Alan Kirkland said.
AFCA added that complaints involving financial difficulty rose 14 per cent to 5,525 in 2023–24, with complaints related to home loans accounting for a third (1,828).
“Lenders should respond quickly when people start to experience financial difficulty, providing appropriate support that’s tailored to the individual,” Locke said.
“We don’t want to see complaints where a once salvageable situation has become dire.”
And what’s the Banks and ASIC doing about the $7.8 Billion $$$$$$$$ SCAMMED FROM Aussies in last 3 years ?
Yep not much that’s for sure.
But hey let’s be usual useless ASIC and find some way to blame Advisers
Are financial firms genuinely becoming worse? Or has AFCA become an easy bail out option for consumers who make poor decisions or fail to take personal responsibility?