AFCA secures $900m for consumers in four years
The Australian Financial Complaints Authority (AFCA) said it has received 200 complaints on average every day since opening its doors in 2018.
In the last four years, Australia’s leading non-government financial complaints authority said it received more than 300,000 disputes across areas like banking, superannuation, investments, and loans – an average of 200 complaints per day.
Financial advice did not feature among the top complaints but complaints about super fund advisers were among the top five firm type.
The top complaints by products were credit cards, home loans, personal transaction accounts, personal loans and MV-comprehensive insurance. By firm type, the most-common was banks followed by general insurers, credit providers, super fund trustees or advisers and underwriting agency.
Subsequent intervention helped Australian consumers recover more than $900 million in refunds and compensation.
Of the complaints received, more than 17,000 were COVID-19 related, such as early release of superannuation during the pandemic and travel insurance claims.
An additional $280 million was recovered in refunds from systemic issues and illegal activity that was reported to Federal regulators.
“The past four years have demonstrated the critical role AFCA plays. As we move into a period of heightened economic uncertainty, and amid increasing natural disasters, the need for AFCA’s services has never been greater,” said David Locke, AFCA chief executive and chief ombudsman.
Almost 180 decisions issued by the AFCA ombudsmen were related to Indigenous communities, awarding more than $1.4 million in cases involving Aboriginal Community Benefit Fund (ACBF) companies. In many cases, it was found that these consumers had been unfairly targeted.
Some 60% of reported financial complaints were resolved by the AFCA in less than 60 days. Two out of three cases were resolved by facilitating agreement between both parties.
Locke added: “As long as the outcomes are fair and just, we think early resolution is good for everyone. For industry, it means retaining customers’ business and goodwill. For consumers, the sooner a matter is resolved the better, because financial disputes can be very stressful.”
In 2021, an independent review of the AFCA by the Treasury found it was “performing well in a difficult operating environment and a changing regulatory landscape.”
Recommendations from the review would inform new AFCA initiatives and projects currently underway.
Earlier this year, the AFCA revealed the number of licensed financial firms with a complaint lodged against them had seen a 5% decrease in the last 12 months. Of the registered complaints, Australia’s Big 4 banks accounted for nearly 20,000 while the four-largest insurers accounted for around 9,400.
AUTHOR
Rhea Nath
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