Banks learn tough lessons as financial complaints soar
THE Australian Financial Complaints Authority has today reported it received over 13,000 phone enquiries in its first month of operation.
AFCA, which opened its doors on November this year, has received so far 6,522 complaints from consumers and small businesses, about financial products or services.
Averaging about 310 complaints per business day, AFCA has so far experienced an increase of more than 47% in complaints received, when compared to the three predecessor schemes.
"This number of calls and complaints is on par with what we were expecting," said CEO and Chief Ombudsman David Locke.
"We want to make sure that members of the public know where to go for help when they have a financial complaint they can't resolve directly with their financial firm," Mr. Locke continued.
"AFCA provides quick and easy access to fair resolutions.
"This is part of our role in rebuilding trust in the financial services sector.
"In fact, while we have only been operating for a month, 15% of the complaints we received in the month of November have already been finalised," Mr Locke said.
Most of the complaints AFCA has received have been about credit (45%), followed by general insurance (21%) and deposit taking (10%). 8% of complaints received were about superannuation.
While most complaints were lodged by individual consumers, 460 complaints were lodged by small businesses.
The most complained provider type were banks with 2,367 complaints, followed by general insurers 1,159 complaints and credit providers 1,040 complaints.
While there has been a high number of complaints initially received by AFCA, less than 6% of AFCA's licensee members have had complaints lodged against them in November.
Complaints about decisions made by financial firms are the most common reason why consumers and small businesses make complaints to AFCA.
This includes issues relating to denial of insurance claims and responsible lending.
Service issues, such as service quality, delay in claim handling or delay in complaint handling are the next most common issues.
"Our streamlined processes and systems have dealt well with the level of calls and complaints received - 80% of complaints have been lodged online, meaning consumers and small businesses have been able to access our service whenever and wherever they need it," he added.
AFCA is currently investigating 84 definite systemic issues and four potential serious contraventions and other breaches.
"Systemic issues are identified in a complaint or several complaints, and have an effect on people beyond the parties to a complaint.
The Australian Financial Complaints Authority (AFCA) is a free and independent ombudsman service that resolves complaints by consumers and small businesses about financial firms.
AFCA was established following the 2016 Ramsay Review into how Australia's external dispute resolution framework could be improved to deliver effective outcomes for all Australian consumers and small business.
On November 1, AFCA replaced the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal as the one-stop-shop for financial dispute resolution.