2020–21 Annual Review

Independent Assessor Report

About the Independent Assessor

The Independent Assessor reviews complaints about the standard of service provided by AFCA in resolving complaints.

Complainants, representatives and financial firms that are affected by how AFCA has dealt with a complaint may lodge a complaint with the Independent Assessor.

The Independent Assessor does not have the power to review the merits or substance of an AFCA decision.

The Independent Assessor reports on issues affecting AFCA’s complaint handling performance and makes recommendations to AFCA in response to issues arising from service complaints.

The Independent Assessor is appointed by, and reports to, the AFCA Board and works in accordance with the Independent Assessor’s Terms of Reference.

The Independent Assessor is not part of the day-to-day running of AFCA and does not answer to AFCA’s senior management or Chief Ombudsman.

During the 2020–21 financial year, the Office of the Independent Assessor received 201 complaints about AFCA’s and its predecessor schemes’ handling of complaints.

The office accepted complaints from individuals, small businesses and financial firms in relation to complaints handled by AFCA, FOS and the CIO.

Complaints lodged by scheme
Scheme 2019–20 2020–21
AFCA 119 192
FOS/AFCA 22 4
FOS 7 -
CIO/AFCA 11 3
CIO 1 2
Complaints to the Independent Assessor compared to complaints to AFCA overall by product line
Product type Independent Assessor AFCA
Banking and finance 106 42,261
General insurance 35 16,912
Superannuation 27 5,249
Investments and advice 23 3,888
Life insurance 10 1,623

Nature of complaints received

Complaints received alleged a range of issues, including:

  • poor quality advice/information provided
  • failure to address key submissions/concerns
  • delays in handling a complaint against a financial firm or AFCA service complaint
  • process or staff were biased
  • non-response to questions/information requested.

The submissions received may include one or more issues.

A proportion of complaints were solely about the scheme’s findings or decisions, including determinations and jurisdictional decisions.

Under clauses 8 and 9 of the Independent Assessor’s Terms of Reference, I cannot consider the merits of a decision or finding. Therefore, complaints that were solely about decisions or findings were ruled outside my jurisdiction to consider.

I received 13 complaints from financial firms, an increase of 60% (8) compared to 2019–2020. These included complaints about case progression delays, AFCA staff being discourteous and a failure to answer questions. Financial firm complaints that were outside my Terms of Reference included complaints about case fees and jurisdictional decisions.

Findings

A total of 192 complaints were closed during the financial year. I completed and issued 61 assessments.

One hundred and twenty-five complaints were closed because they were outside my Terms of Reference to consider. Six complaints were withdrawn at the complainant’s request, or because they did not respond to an information request or other correspondence.

Complaints were outside my jurisdiction if they were solely about the merits of a decision or finding, or the complaint against the financial firm or a service complaint to AFCA had not been finalised (or submitted yet).

Complaints that were outside the Terms of Reference because the original complaint against the financial firm was ongoing, or a service complaint to AFCA had not been made, or was ongoing, may be resubmitted if the complainant remained dissatisfied with the service received once the other processes were completed.

Proportion of complaints closed as a result of assessment or outside Terms of Reference ruling
  2019–20 2020–21
Assessment 60 61
Closed as outside Terms of Reference/withdrawn/failure to respond 108 131
Outside Terms of Reference rulings
  2019–20 2020–21
Complaint not yet made to AFCA 26 41
Merits-based complaint 16 34
Open financial firm complaint 46 1 25
AFCA service complaint in progress   15
Other reason 10 9
Time period expired 4 1

Just over half (32 of 61) of all assessments found at least some element of a complaint was substantiated. Some examples of complaints that were substantiated are:

  • delays in progressing a complaint against a financial firm
  • delay in responding to a complaint about AFCA’s customer service
  • failure to provide updates on the progression of a complaint against a financial firm or AFCA service complaint
  • failure to respond to reasonable questions or information requests
  • provision of poor quality, incorrect or confusing information.

Recommendations

When a complaint is substantiated, I may make a recommendation to AFCA’s Chief Ombudsman that AFCA offer an apology, pay compensation for any distress or inconvenience caused by the poor service (non-financial loss) or take other action.

During the 2020–2021 financial year, I recommended AFCA apologise to 29 complainants for service failings, and pay a total of $13,650 non-financial compensation. In three instances I recommended that AFCA take other action, such as referring a request for copies of case file documentation to AFCA’s Privacy Manager, exchanging a financial firm’s submission with the complainant and responding to outstanding questions about a determination. AFCA accepted and actioned all recommendations in full.

In addition to the recommendations made in response to individual complaints, I also make business-improvement recommendations to AFCA under clause 3 of the Independent Assessor Terms of Reference. In 2020–2021, these included that AFCA review its policies, procedures and training for handling requests by a party that documentation not be exchanged with the other party, and that AFCA be more proactive in communicating the timing and reasons to complainants for reallocations of a complaint to a new case worker.

Reporting

I reported quarterly to AFCA’s Board. I also liaised with, reported to and/or met with representatives from AFCA and met with Treasury regarding Treasury’s Independent Review of AFCA.

In conclusion

Complaints to the Independent Assessor have steadily increased since AFCA commenced in November 2018.

During 2020–2021, my office worked with AFCA’s Business Intelligence and Analytics Team to improve (and largely automate) the collation and analysis of complaint data and statistics.

I would like to thank AFCA’s management and staff for the cooperative and professional manner with which they have interacted with me and my office. I would also like to thank the individual complainants for taking the time to bring their complaints to me.

Melissa Dwyer
The Independent Assessor of the Australian Financial Complaints Authority

 

1 The ‘ongoing/open complaint with a financial firm or AFCA service complaint’ category was separated this year to capture whether it was the complaint about the financial firm that was open and ongoing, or the AFCA service complaint.

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