2020–21 Annual Review

Financial difficulty complaints

Demographics of people in financial difficulty

Between 1 July 2020 and 30 June 2021

32% of complainants were represented by a friend or family member

4% were represented by a financial counsellor

80% of complainants lodged online

1% of complainants requested interpreting language services

4% of complainants identified as Aboriginal Australian and/or Torres Strait Islander

Received complaints by state and territory 1
Received complaints by state and territory chart
State Percentage
NSW 31%
Victoria 31%
Queensland 21%
Western Australia 10%
South Australia 6%
ACT 1%
Tasmania 1%
NT 1%
Not provided 4%
Other country 1%
Received complaints by gender of complainant
 Received complaints by gender of complainant chart
Gender Percentage
Female 44%
Male 55%
Not provided   1%
Received complaints by age of complainant
Complaints received by age chart
Age Percentage
18–24 2%
25–29 6%
30–39 24%
40–59 45%
60+ 14%
Not provided 9%
Complaints received

5,184 complaints received

45% resolved at Registration and Referral stage

Top five financial difficulty complaints received by product3
Product Total
Personal loans 1,436
Credit cards 1,285
Home loans 1,209
Business loans 411
Hire purchase/lease 154
Top five financial difficulty complaints received by issue 3
Issue Total
Financial firm failure to respond to request for assistance 2,740
Decline of financial difficulty request 1,220
Request to suspend enforcement proceedings 341
Default notice 206
Default judgment obtained 122
Complaints closed

5,433 complaints closed 4

Average time to close a complaint 86 days

Stage at which financial difficulty complaints closed
Stage Total
At Registration 2,463
At Case Management 1,997
At Rules Review 364
Preliminary Assessment 286
Decision 323
Average time taken to close financial difficulty complaints
Time Total
Closed 0–30 days 26%
Closed 31–60 days 32%
Closed 61–180 days 32%
Closed 181–365 days 7%
Closed greater than 365 days 3%


About financial difficulty

Financial difficulty is when an individual or small business is in a situation where they are unable to meet their repayment obligations.

Sickness, unemployment, over-commitment, business downturn and natural disasters are some of the disruptive events that can cause financial difficulty.

Given the immediacy of the situation, and the stress involved for the consumer or small business, financial difficulty complaints often have an urgency beyond other types of financial disputes. To ensure these complaints are dealt with in an efficient, timely and fair manner, AFCA uses a streamlined process for financial difficulty disputes.

The types of issues AFCA receives complaints about include a financial firm:

  • failing to respond or responding inappropriately to a financial difficulty request
  • issuing default notices when a complainant is experiencing financial difficulty
  • continuing action against a complainant to recover a debt after they have made a financial difficulty request
  • declining requests for assistance in repaying a default court judgment (which AFCA can consider in some situations only).

Government support, business relief measures and a steadying economy, following the early period of the COVID-19 pandemic, appears to have had a positive effect on financial difficulty complaint levels in 2020–21. This year, AFCA received 5,184 financial difficulty complaints, a decrease of almost 40% compared to the 2019–20 financial year.

Of the 2020–21 complaints, personal loans (1,436), credit cards (1,285) and home loans (1,209) were the most complained about product types. AFCA also received 411 financial difficulty complaints about business loans.

As in 2019–20, the predominant issue was financial firms failing to respond to requests for assistance, with 2,740 complaints. The second most common issue was financial firms declining financial difficulty requests with 1,220 complaints.

Due to the sensitivity and urgency of financial difficulty complaints, we encourage financial firms to negotiate a resolution early in our dispute resolution process. The financial difficulty team held 738 conciliations during the year, with 328 of these complaints reaching a resolution at this stage. Many other matters that didn’t resolve at the conciliation, did resolve shortly afterwards.

AFCA closed 5,433 financial difficulty complaints in 2020–21. Of these complaints, 74% (4,002) were resolved within 90 days. Nearly half (45%) of financial difficulty complaints were resolved at the Registration and Referral stage when AFCA refers the dispute back to the financial firm.

Case study

The complainant had a home loan facility and two transaction accounts with the financial firm. The complainant ceased work due to severe mental health issues and made an application under their Income Protection Insurance Policy. The complaint was primarily about whether the financial firm complied with its financial difficulty obligations in relation to her loan accounts.

Findings and outcome

A financial firm has obligations under the National Credit Code and industry codes of practice to assist its customers in financial hardship.

A customer does not need to explicitly request hardship assistance. The financial firm’s obligations arise when the customer gives the financial firm written or oral notice that they will be unable to meet their contractual obligations.

After extensive discussions with the parties, an AFCA case manager provided the parties with a recommendation on the issues in dispute. The complainant was unwell and was unable to accept the recommendation.

The recommendation found that the financial firm breached its obligations under the National Credit Code, as well as its commitments under the applicable industry code of practice because:

  • the financial firm was made aware on two occasions that the complainant was experiencing financial difficulty and severe mental health issues
  • the firm did not take reasonable steps to inform the complainant of her right to request hardship assistance or request information, so it could assess and consider the complainant’s financial position and/or alternate options
  • it was inappropriate for the financial firm to not engage with the complainant until they had acknowledged receipt of legal proceedings.

The financial firm reconsidered its position given the complainant’s mental health issues and financial circumstances. The financial firm agreed to waive the significant loan arrears and reduce the interest rate on the loan.

AFCA issued a determination endorsing the offer made by the firm. After the determination was issued, the complainant requested details of the offer as well as an apology. AFCA facilitated finalisation of the matter based on the offer made and secured a written apology from the firm.

During the handling of the complaint, the complainant’s insurance claim was accepted. After resolution of the complainant’s loan arrears, she was able to meet her ongoing payments.

Case studies are used to demonstrate AFCA’s approach to an issue and have been simplified for length and clarity.


1 One complaint can have multiple complainants from different states/territories.

2 One complaint can have multiple products.

3 One complaint can have multiple issues.

4 This includes 1,039 complaints received before 1 July 2020, and 4,394 received from 1 July 2020 to 30 June 2021.

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