Almost 5k advice and investments complaints to AFCA in FY22–23
Investment and advice complaints have seen a 51 per cent increase in the last financial year, largely attributed to complaints against Dixon Advisory and Best Leader Markets, according to the Australian Financial Complaints Authority (AFCA).
In the past 12 months, advice complaints have grown from 3,207 in FY2021–22 to 4,840 in FY22–23. Of this figure, Dixon Advisory comprised 1,726 of the complaints and Best Leader Markets received 656.
Excluding numbers from Dixon Advisory and Best Leader Market, the total would have been 2,458, which would have represented a decrease in complaints of 23 per cent, AFCA said.
Overall, a record 96,987 complaints have been filed to the financial complaints authority, marking a 34 per cent rise on the previous financial year.
AFCA chief executive and chief ombudsman, David Locke, observed a rise in growing financial stress, scams and issues with insurer claims handling occuring for over a year.
“We are deeply concerned by the volume of complaints consumers are having to escalate to AFCA,” he said.
“It’s not fair on consumers and not good for business. We need to see a significant improvement from firms.”
The top issue in complaints to AFCA in FY22-23 is delays in insurance claim handling (up 76 per cent). Overall, general insurance complaints have risen by 50 per cent to 27,924.
“We have been raising our concerns about claim delays with insurers for over 12 months now,” Locke said.
“It is disappointing that this continues to be a concern. While we acknowledge the challenges insurers have faced, the bulk of complaints in the past year were not about natural disasters but about regular claims. We would like to see insurers take the necessary steps to ensure fewer policyholders have to take a complaint to AFCA.”
Super complaints also rose 32 per cent overall. Within this was a 136 per cent rise in complaints about claim delays, including the payment of death benefits.
Scam-related complaints rose by 46 per cent to 6,048. Previously, Minister for Financial Services, Stephen Jones, has described scams as “a menace” and “a destructive force” in the economy and had announced the launch of the National Anti-Scam Centre this month to combat the issue, to be led by Australia’s corporate and competition regulators.
“We witness first-hand the human cost of this serious and sophisticated financial crime,” Locke said.
“AFCA believes there is a need for enforceable standards, to lift the bar on scam prevention and remediation. This will also aid the work we do as an ombudsman service.”
Overall, in 2022-23 consumers secured $253.8 million in compensation and refunds through the complaints authority. Additionally, the introduction of the much-awaited Compensation Scheme of Last Resort (CSLR), which passed both houses in June, would help provide compensation to victims of financial misconduct who have received a determination in their favour from the AFCA but who have not been paid.
As of 1 June 2023, AFCA said there are 4,875 paused complaints, including matters that are closed because there has been an AFCA determination but no payment made.
This included complaints against Dixon Advisory, whose Australian financial services licence was suspended in April last year for alleged conflicts, best interests failures, and inappropriate advice, with the corporate regulator commencing civil penalty proceedings against the firm.
AUTHOR
Rhea Nath
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