Australia Saw Over 80,000 Financial Complaints Last Fiscal Year

Australia,  Investment Trends

The Australian Financial Complaints Authority (AFCA) has received 80,546 complaints from Australians on financial disputes with banks, insurers, super funds, and other financial firms in the last 12 months.

The number of complaints received between 1 July 2019 and 30 June 2020 jumped 13.7 percent from the previous year. Most of the complaints were about credit, insurance claims, and superannuation.

Announced on Thursday, the watchdog has secured AUD 258.6 million ($179.12 million) in compensation and refunds direct to consumers in that period.

The regulator also detailed that it had resolved 78 percent of all the received cases and 73 percent of the complaints were settled in favor of the complainant, with banks being the most complained about financial institutions.

Commenting on this, David Locke, chief executive officer and chief ombudsman at AFCA, said: “One in ten complaints also related to financial difficulty – where a consumer was unable to make repayments on loans due to unforeseen circumstances or over-commitment.”

COVID-19 increasing financial hardships

The ongoing crisis due to the COVID-19 outbreak also added to the complaints related to financial difficulties.

“Australian consumers have faced a number of significant challenges this year, ” Locke added. “The pandemic has had a particular impact on Australian households, with 20% of COVID-19 related complaints being about financial hardship.”

Since the virus was declared a pandemic in March, AFCA has received 4,773 complaints relating to COVID-19 – out of them 1,813 were general insurance claims and over 1,500 were travel insurance complaints.

“We commend financial institutions for their quick response to the pandemic. As always, we encourage banks and insurers to maintain open and transparent communication with their customers about the support available to them if they’re experiencing financial difficulty, ” he continued.

“We anticipate seeing more financial difficulty related COVID-19 complaints over the next six months as government support, such as JobKeeper payments are wound back, along with the end of financial firm initiatives such as a ban on rental evictions, and mortgage pausing.”

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