Annual Review 2021–22

Board Chair message

John Pollaers

The financial services sector in Australia has experienced an extraordinary level of uncertainty and volatility over the last financial year. This has been driven by the lingering impacts of the COVID-19 pandemic, unanticipated interest rate rises, rapid inflation, intensifying climate-driven disasters, and the rise in new financial products and services. These factors have, in turn, had an impact on consumers of financial services and the types of complaints AFCA has received during this period.

While many businesses and consumers have benefited from digital services in the last 12 months, we have seen a concerning increase in the number of complaints involving increasingly sophisticated and novel scams. We know from the complaints we deal with that scams have an exceptionally detrimental impact on consumers and small businesses. This is evidenced by an Australian Competition and Consumer Commission report, which revealed that in 2021 scams accounted for more than $2 billion in losses and resulted in significant emotional and life-changing consequences for individuals, families and businesses.

We have also seen an increase in the number of complaints relating to natural disasters, particularly those relating to severe weather events. During the past year, consumers were impacted by earthquakes, severe storms and flooding. Because of these events, we have seen intense pressures placed on consumers and small businesses, many of whom experienced short- and long-term financial difficulty.

Insurers faced, and continue to face, complex challenges as they try to manage claims and get people back on their feet. We know there are significant issues with the supply of building materials, parts and labour because of national and global events that are outside insurers’ control, but which result in increasing numbers of complaints.

Notwithstanding this, we are concerned at the rise in complaints being escalated to AFCA about these issues. We want to better understand the cause of complaints and we continue to engage and work with insurers to help them resolve complaints faster and, ultimately, to reduce the incidence of complaints.

At AFCA, we have expanded our general insurance complaints team in response to the unusually high number of insurance complaints occurring due to the scale of recent disasters. We also activated our ‘significant event’ response plan, giving priority to urgent, event-related financial complaints. We worked with other stakeholders, including consumer groups and industry participants, to provide timely information and pathways to those affected by events.

Anticipating that these climate-driven events will increase, as will economic uncertainty and the creation of increasingly innovative and complex financial products and services, the need for AFCA’s services has never been more important.

AFCA continues to play a vital role in the regulatory landscape of the financial services sector, by investigating and resolving individual complaints that people have with financial services firms.

Number of complaints we have received

In 2021–22, AFCA received 72,358 complaints from consumers and small business owners and it resolved 71,152 cases, with $207,733,327 in compensation and refunds paid.

It was pleasing to see complaints involving financial difficulty decrease from more than 5,000 to 4,442. This reflects the work the financial service sector has done to support consumers during the COVID-19 pandemic in recent years.

The introduction of RG271 in October 2021, which reduced internal dispute resolution (IDR) timeframes generally, has had a positive effect on the industry.

AFCA continues to promote the early resolution of complaints as the best outcome for all parties. In an ideal world we would put ourselves out of business by improving practices and minimising disputes. However, given the current complaint numbers and the number of systemic issues AFCA identified in 2021–22, there is still a way to go.

AFCA identified and reported 68 definite systemic issues and serious contraventions of the law to federal regulators, and secured an additional $18,275,607 in refunds to 167,033 consumers.

To ensure AFCA remains current and continues to build on the foundational progress delivered in the last four years, we have set ourselves an ambitious program of work, which is outlined in AFCA’s three-year Strategic Plan (2021–24). Our plan is to positively transform the way AFCA delivers its services to financial firms, consumers and small businesses.

Our five strategic themes include:

  1. Customer service
  2. Efficiency
  3. External engagement
  4. Data and technology
  5. People experience

AFCA’s vision is to be a world-class ombudsman service that not only efficiently and effectively resolves disputes, but also improves practices and minimises the causes of disputes arising in the first place. It seeks to meet diverse community needs and be trusted by all.

Independent Review

The AFCA Board and I welcomed the Independent Review of AFCA, which was conducted by the Commonwealth Treasury. This started in January 2021 and reported in November 2021. The review assessed whether AFCA is meeting its statutory objectives of resolving complaints in way that is fair, efficient, timely and independent.

The report presented a positive assessment of AFCA’s service and confirmed that ‘AFCA is performing well in a difficult operating environment and a changing regulatory la ndscape.’

In the report, the reviewers affirmed AFCA’s ‘critical role in providing consumers and small business with access to a binding, out-of-court dispute resolution service’ and the benefit to financial firms and consumers from this service ‘as an alternative to a court or tribunal process’.

The report confirmed that AFCA’s average time to resolve disputes compared favourably to the performance of predecessor schemes Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO), and the Superannuation Complaints Tribunal (SCT) and its international counterpart in the United Kingdom. In the first two years of operation, AFCA’s overall average was 74 days. In 2021–22, this reduced to 72 days. 

The report contained 14 recommendations and AFCA agreed in principle with all recommendations.

AFCA has designed a comprehensive three-year program of work to manage the implementation of recommendations in a coordinated way. You can read more about this work here.

AFCA’s Board didn’t just accept these recommendations, though, we also looked in detail at all the submissions that had been made to the review to understand the views of both consumer and industry stakeholders. Our program aims to address the wider feedback received throughout the review.

New AFCA Funding Model

Since AFCA started handling complaints on 1 November 2018, it operated under an interim funding model. This was a hybrid model, based on aspects of the previous external dispute resolution schemes’ funding arrangements, and the APRA levy model for superannuation trustees. The interim funding model was intended to remain in place for the first three years of AFCA operations while AFCA established an evidence base of complaint volumes and complexity in an expanded jurisdiction.

In early 2021, AFCA appointed PwC to undertake a review of its previous funding model and develop a new model that would be fit-for-purpose, sustainable and fair to AFCA members. 

In developing the new model, AFCA and PwC took AFCA member feedback into account and considered the key findings and recommendations of the recently published AFCA Independent Review. They did this with a particular focus on a ‘user-pays’ approach that reduces the burden on smaller members and those industries that are not heavy users of AFCA, minimising cross subsidisation across sectors, and supporting firms to better forecast and budget for complaints. The new funding model that commenced from 1 July 2022 is fair, transparent, equitable and reduces financial impact to small members.

The new funding model represents a significant departure from the fee and charging structure in place since AFCA’s inception, and has received positive support from across the financial services sector, key stakeholders and government.

IT and business transformation

AFCA is currently undertaking a major project to upgrade our IT systems and it will fundamentally change the way we do business.  

The upgrade will modernise AFCA’s systems and provide a range of benefits, including a completely redesigned member portal that makes it easier to interact with AFCA, and a new consumer portal where complainants can manage their open complaints and documentation. Both will be seamlessly integrated with a new case management system. 

Investing in our IT and business systems is critical if we are to reach our goal of being a world-class ombudsman service.

For consumers and small business, we are focusing on achieving accessible, simple and tailored customer experiences that make it easy to deal with AFCA and provide fair and timely outcomes. For members, we are focusing on making it easier to do business with us, supported by a service offering that assists members to improve complaint handling and minimise disputes.

Data and analytics 

The Board and I recognise the unique perspective provided by AFCA’s position in the financial industry, and we are passionate about sharing data and insights with all stakeholders.

This year, we saw the full implementation of our data and analytics strategic initiative, delivering significant value to AFCA, our people, consumers, small business and members. Under the project, we implemented and launched predictive complaint forecast and triage models to improve and evolve forecasting, remove waste and inefficiencies from complaint handling processes, and provide better, faster experiences for consumers and members.

In 2021, we were proud to launch the Member Benchmarking Dashboard. This new interactive platform provides financial firms with near real-time complaints data, insights into their own external dispute resolution performance, and the opportunity to compare their performance against an anonymised set of similar financial firms.

The dashboard was a significant milestone and members have already told us how valuable its insights are in identifying potential improvements to their dispute resolution practices.

This world-class suite of data is in addition to the detailed and interactive reporting that’s published every six months in the publicly available AFCA Datacube.

I am pleased to share that we also introduced robust data governance and ethics frameworks for the use of technologies such as artificial intelligence, and to improve accuracy, quality and security of AFCA’s data. This will also allow us to continue developing agile internal analytics capability among our people to support future data and analytics growth.

Over the coming year, AFCA will continue to focus on deeper, data-driven analysis to provide a better experience for members, consumers and small business, and engage with industry to influence best practice.

Awareness and accessibility

AFCA has an obligation to the diverse community we serve to ensure they are aware of Australia’s financial ombudsman and that our services are accessible to all.

For a service to be truly accessible, people must know about it, and so AFCA has developed a three-year strategy that builds awareness through a data-led multichannel approach, targeting demographics less likely to know about our service.

The strategy is designed to be effective, cost-efficient and aims to communicate information about our service to consumers at the time when they are experiencing a financial dispute.

To ensure our service is accessible and easy to use for all complainants, we have consulted with internal and external stakeholders to develop an accessibility framework, reinforced by existing customer experience principles, to embed accessibility into everything we do.

I am particularly proud of AFCA’s efforts to design, deliver and promote tailored resources to improve accessibility for community members who value a different approach to communication, such as culturally and linguistically diverse communities.

In the coming year, we will launch AFCA’s Reflect Reconciliation Action Plan to ensure strong support, awareness and commitment across the organisation to deliver a culturally appropriate service for First Nations peoples.

We are also continuing to work within the Accessibility and Inclusion Network to review, improve and relaunch existing accessibility resources to support our people working with vulnerable and disadvantaged consumers.

The year ahead

In the coming year, AFCA will continue to focus on delivering on our strategic priorities.

Our work towards implementing the recommendations of the Independent Review will continue.

We will also be focusing on complaint areas that have seen significant growth, including general insurance claim delays, which are both a direct and collateral result of natural disasters that are putting pressure on the industry’s resources.

Other complaint areas we are monitoring are the growing number of disputed transactions, including scams and emerging products and services such as cryptocurrency and buy-now pay-later.

AFCA is also ready to respond should the Compensation Scheme of Last Resort (CSLR) legislation be passed. AFCA has been asked to establish the CSLR entity and operations under its own independent Board, and we are well-placed to meet this important milestone.

In April 2020, AFCA paused all complaints against insolvent financial firms while waiting for the introduction of this legislation. These complaints will continue to be paused and will be assessed once the CSLR bill is enacted into law.

Even though AFCA will only be able to fully assess the impact of the CSLR, and its relevance to paused complaints, once the scheme is legislated, we are ready and resourced to review all relevant complaints should the legislation be passed.

AFCA looks forward to working with the Government and stakeholders to help implement this important reform.

Thank you 

I want to thank AFCA’s people for their great work over the past year. I continue to be impressed by their unwavering commitment to providing a service that is friendly, helpful and fair for all.

I would also like to thank my Board who provide invaluable expertise and support to AFCA’s leadership. During the year, we farewelled Johanna Turner and Alan Wein and thank them for their contributions over the years. We also welcomed Gary Dransfield, who has extensive experience in general insurance, and Delia Rickard, who has a distinguished public service career in consumer policy.

I thank AFCA’s Chief Ombudsman and CEO David Locke and the management team for their professionalism and leadership.

Professor John Pollaers OAM

Chair of the AFCA Board

“AFCA continues to promote the early resolution of complaints as the best outcome for all parties”

Professor John Pollaers OAM
Sorry, we’re currently offline.

Would you like to end your chat with AFCA?

Please bear in mind that your conversation will not be saved.

AFCA chat service terms and conditions

Welcome to our live chat help service.

Please be advised we cannot provide you with financial or legal advice. However, we may be able to refer you to a community legal centre or financial counselling service if you need help.

Our live chat is operated by Genesys Cloud on behalf of AFCA. Any personal information provided in this chat will be captured by both organisations in accordance with their privacy policies, available at and


We provide consumers and small businesses with fair, free and independent dispute resolution for financial complaints.

Please enter your details to start your chat with an AFCA representative.

Please enter your name
Please enter a valid email address
Please enter a valid phone number

We provide consumers and small businesses with fair, free and independent dispute resolution for financial complaints.

Welcome to our live chat help service.

An agent should be with you shortly.