AFCA ups compensation cap for investment and advice complaints
The Australian Financial Complaints Authority (AFCA) has updated the monetary limits and compensation caps for the complaints it receives.
These cover the maximum value of a claim for compensation and the maximum amount that can be awarded to a consumer or small business for complaints about banking and finance, general insurance, life insurance and investments and advice.
AFCA said superannuation complaints are excluded, however, as they are subject to separate rules and the no monetary limit applies in the superannuation jurisdiction.
The rules are updated every three years in line with the higher of either the percentage increase in Consumer Price Index inflation and male total average weekly earnings.
The maximum value of a claim from a consumer from 1 January 2024 cannot exceed $1,263,000 or $6,317,000 if claimed by a small business or primary producer. The sum for a consumer claim has increased from $1,085,000 in the previous three years and $1 million pre-2021.
The new sum applies to all complaints received by AFCA from 1 January 2024.
It also noted a financial firm that is the subject of a complaint may be asked to contribute to legal, professional or travel costs incurred by the complainants which would be no more than $5,000.
At the start of this year, AFCA announced it received over 100,000 complaints during 2023,
Some 102,790 complaints were received by AFCA throughout 2023 from consumers and small businesses who were unable to resolve disputes directly with their financial firms.
Looking at the top five products complained about during 2023, personal transaction accounts saw the highest number of complaints at 16,028 – a 64 per cent rise. This was followed by credit cards at 12,124, comprehensive vehicle insurance at 9,565, home building insurance at 8,073 and home loans at 7,461.
Unauthorised transactions topped the list for the top issues complained about last calendar year, receiving 12,289 complaints – up by 48 per cent.
Delays in claim handling followed with 10,692 complaints, as well as service quality with 7,190, claim amount with 6,447 and denial of claim at 4,791.
AUTHOR
Laura Dew
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