A composite image of signage of Australia's 'big four' banks ANZ, Westpac, the Commonwealth Bank (CBA) and the National Australia Bank (NAB).
A composite image of signage of Australia's 'big four' banks ANZ, Westpac, the Commonwealth Bank (CBA) and the National Australia Bank (NAB). JOEL CARRETT

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.

 

A composite file image showing Banking CEOs leaving the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Sydney (L-R) Westpac CEO Brian Hartzer taken Wednesday, November 21, 2018, Commonwealth Bank CEO Matt Comyn taken Monday, November 19, 2018 and Macquarie Group's outgoing CEO Nicholas Moore taken Thursday, November 22, 2018. (AAP Image/Joel Carrett) NO ARCHIVING
A composite file image showing Banking CEOs leaving the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Sydney (L-R) Westpac CEO Brian Hartzer taken Wednesday, November 21, 2018, Commonwealth Bank CEO Matt Comyn taken Monday, November 19, 2018 and Macquarie Group's outgoing CEO Nicholas Moore taken Thursday, November 22, 2018. JOEL CARRETT

"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.

 

National Australia Bank Chief Customer Officer Andrew Hagger (second from left) leaves the Federal Court, in Melbourne, Monday, August 13, 2018. The $2.6 trillion superannuation industry will be taken to task by a royal commission over whether funds act in the best interests of Australians when managing their retirement savings. Australia's largest super funds head a long list of players called before a two-week financial services royal commission hearing that began in Melbourne on Monday. (AAP Image/James Ross) NO ARCHIVING
National Australia Bank Chief Customer Officer Andrew Hagger (second from left) leaves the Federal Court, in Melbourne, Monday, August 13, 2018. JAMES ROSS

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.

 

Former chair of NAB's superannuation trustee NULIS Nicole Smith (centre) is seen leaving after giving evidence at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry at the Federal Court in Melbourne, Thursday, August 9, 2018. The $2.6 trillion superannuation industry will be taken to task by a royal commission over whether funds act in the best interests of Australians when managing their retirement savings. Australia's largest super funds head a long list of players called before a two-week financial services royal commission hearing that began in Melbourne on Monday. (AAP Image/Daniel Pockett) NO ARCHIVING
Former chair of NAB's superannuation trustee NULIS Nicole Smith (centre) is seen leaving after giving evidence at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry at the Federal Court in Melbourne, Thursday, August 9, 2018. The $2.6 trillion superannuation industry was taken to task by a royal commission over whether funds act in the best interests of Australians when managing their retirement savings. DANIEL POCKETT

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.

 

Head of Superannuation, ANZ, Mark Pankhurst (centre) leaves the Federal Court in Melbourne, Wednesday, August 15, 2018. The $2.6 trillion superannuation industry will be taken to task by a royal commission over whether funds act in the best interests of Australians when managing their retirement savings. (AAP Image/Daniel Pockett) NO ARCHIVING
Head of Superannuation, ANZ, Mark Pankhurst (centre) leaves the Federal Court in Melbourne, Wednesday, August 15, 2018. DANIEL POCKETT

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.

 

Commonwealth Bank of Australia CEO Matt Comyn leaves the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Sydney, Tuesday, November 20, 2018. (AAP Image/Joel Carrett) NO ARCHIVING
Commonwealth Bank of Australia CEO Matt Comyn leaves the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Sydney, Tuesday, November 20, 2018. JOEL CARRETT

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.

 

NAB chairman Ken Henry leaves the Banking Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Melbourne, Tuesday,
NAB chairman Ken Henry leaves the Banking Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Melbourne, Tuesday, AAP

About AFCA

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.

Consumers and small businesses can lodge a complaint to AFCA online here, via email to info@afca.org.au or by phoning 1800 931 678.