AFCA reports ‘disappointing’ 9% rise in FY24 complaints
The 2023–24 financial year saw another record number of financial complaints filed to the Australian Financial Complaints Authority (AFCA).
More than 105,400 disputes were received by the external dispute resolution body throughout FY24, representing a 9 per cent rise from the 96,987 complaints made in FY23.
Despite the record number of complaints made in FY24, the 9 per cent increase was notably less than the unprecedented 34 per cent surge during FY23.
“While we haven’t seen the scale of increase we experienced a year ago, these record numbers are still too high,” described David Locke, AFCA chief ombudsman and CEO.
“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,” he reminded firms.
The chief ombudsman has continually urged businesses to improve their internal dispute resolution schemes in a bid to reduce growing complaint numbers. Earlier this year, Locke told member firms that AFCA should only be used for complex matters as an alternative to going to court, instead of matters such as service quality or delays.
While specific FY24 numbers relating to investment and advice complaints are yet to be released by AFCA, there were 4,840 complaints made in this segment during FY23 – a 51 per cent rise from the previous year. The significant growth was largely due to Dixon Advisory, which comprised 1,726 of the complaints.
AFCA’s preliminary data for FY24 highlighted scams as a key driver of the rising complaint numbers, coupled with a surge in complaints about comprehensive motor vehicle insurance, creating record numbers in the banking and finance and general insurance sectors.
Banking and finance disputes increased by 11 per cent to 59,636, and general insurance saw a lesser rise of 4 per cent to 29,096. Meanwhile, scam-related complaints swelled by 81 per cent to 10,951 in the last financial year. Transactions that customers considered unauthorised were the most common issue in complaints to AFCA.
Moreover, Locke recognised instances of sophisticated scam activity in the superannuation sector as a key concern.
He explained: “We urge super fund trustees to review the steps they have in place to protect members from fraud. 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.”
The top five most complained about products were personal transaction accounts at 16,365 complaints, followed by credit cards at 11,841, personal loans at 7,660, home loans at 6,913, and online accounts at 2,533.
AUTHOR
Jasmine Siljic
Recommended for you
Following an extraordinary general meeting today, Dixon Advisory parent company E&P Financial Group’s shareholders have voted on its proposed delisting from the ASX.
While overall financial adviser numbers have dipped below 15,500 this week, Rhombus Advisory is experiencing growth and approaching 500 advisers in its ranks.
Iress’ Xplan continues to dominate the financial planning software market with a multitude of uses, according to Netwealth research, despite newer players battling for a piece of the pie.
ASIC has shared the percentage of breach reports related to financial advice in FY24, noting increased reporting by smaller AFSLs.
