Annual Review 2022–23
Contents
- About this Annual Review
- Year at a glance
- Acknowledgement of country
- Board Chair message
- Chief Executive Officer and Chief Ombudsman message
- Organisational overview
- AFCA Independent Review
- Complaints
- Who complained to AFCA?
- Overview of complaints
- Open cases
- Closed cases
- Banking and finance complaints
- Buy now pay later
- Scam complaints
- Financial difficulty complaints
- Small business complaints
- General insurance complaints
- Significant events
- Life insurance complaints
- Superannuation complaints
- Investments and advice complaints
- Cryptocurrency
- Complaints lodged by Aboriginal and Torres Strait Islander peoples
- Complaints lodged by consumer advocates and financial counsellors
- Complaints lodged by paid representatives
- Complaints outside AFCA’s Rules
- AFCA’s Systemic Issues function
- AFCA’s Code compliance and monitoring functiong
- Engagement, awareness and accessibility
- Corporate information
- AFCA General Purpose Financial Report
- Glossary
On 22 June 2023, the Australian Parliament passed legislation that established a Compensation Scheme of Last Resort (CSLR). This was a huge step forward in consumer protection in the Australian financial services sector. AFCA and its predecessor schemes have long supported the introduction of such a scheme.
We firmly believe Australia needs a compensation scheme for those entitled to a remedy for financial misconduct, but who have no redress because a financial firm becomes insolvent, or does not pay compensation awarded under an AFCA determination.
The CSLR will facilitate payments of up to $150,000 to eligible consumers who have received an AFCA determination awarding compensation in certain types of complaints, within the scope of the scheme, but where no payment has been made.
The Australian Government has asked AFCA to set up the CSLR as an independent, not-for-profit company with its own board, with funding arrangements established by the Government.
The Government’s intention is that consumers will be able to lodge claims against the scheme from April 2024.
The scope of the CSLR is a matter for government policy. Decisions on eligibility will be made by the operator of the CSLR, which will be independent of AFCA.
More information about the CSLR is available on its website at cslr.org.au.
Paused complaints
From April 2020, AFCA paused complaints against insolvent financial firms while awaiting the details of the scope and timing of a CSLR.
Following the passing of the CSLR legislation in June 2023, AFCA commenced reviewing the status of nearly 5,000 paused complaints to determine eligibility for the scheme. The review is continuing.
These complaints included:
- closed complaints already determined by AFCA, but where no payment had been made by the firm
- open complaints on pause not yet considered by AFCA.
Insolvent financial firm complaints and unpaid compensation
As at 30 June 2023, AFCA had 4,905 open complaints involving 57 financial firms impacted by insolvency. Consumer claims in these cases were estimated at over $696 million, not all of which will be eligible for the scheme.
Please note: Claim amounts and outcome amounts are estimates only and may be subject to change for various reasons, including further validation.
Open insolvent financial firm complaints
|
Total open complaints against insolvent firms |
4,905 |
|---|---|
|
Total number of financial firms |
57 |
|
Total consumer claim amounts ¹ |
$695,969,616 |
¹ Total claim amount likely to be higher, as a number of claims on open cases are yet to be calculated, recorded or validated.
Profile by primary business type
|
Primary business |
Number of firms |
Number of complaints |
Total claim amount |
|---|---|---|---|
|
Financial advisor / planner |
20 |
1,992 |
$378,760,082 |
|
Foreign exchange dealer |
2 |
1,162 |
$253,608,399 |
|
Funeral insurance provider |
4 |
1,133 |
$7,915,665 |
|
MIS operator / fund manager |
6 |
272 |
$28,074,948 |
|
Derivatives dealer |
3 |
229 |
$13,715,361 |
|
BNPL provider |
1 |
16 |
$7,719 |
|
Corporate advisor |
1 |
16 |
$8,029,978 |
|
Securities dealer |
4 |
13 |
$2,655,319 |
|
Timeshare scheme operators |
1 |
13 |
$61,867 |
|
General insurance broker |
2 |
11 |
$75,936 |
|
FinTech |
1 |
11 |
$10,978 |
|
Credit provider |
4 |
11 |
$34,000 |
|
Mortgage broker |
2 |
9 |
$2,101,000 |
|
Debt collector or buyer |
2 |
8 |
$12,348 |
|
Make a market |
1 |
6 |
$686,917 |
|
Finance broker |
2 |
2 |
$19,100 |
|
Stockbroker |
1 |
1 |
$200,000 |
|
Total |
57 |
4,905 |
$695,969,616 |
Closed insolvent financial firm complaints
|
Unpaid determinations involving insolvent firms |
308 |
|---|---|
|
Total number of financial firms |
29 |
|
Total amount awarded to consumers (excluding interest) |
$14,720,642 |
Profile by primary business type
|
Primary business |
Number of firms |
Number of complaints |
Total outcome amount |
|---|---|---|---|
|
Funeral insurance provider |
3 |
181 |
$1,357,068 |
|
MIS operator / fund manager |
5 |
62 |
$6,386,774 |
|
Financial advisor / planner |
12 |
34 |
$6,305,562 |
|
Derivatives dealer |
3 |
21 |
$691,338 |
|
Securities dealer |
3 |
7 |
$564,418 |
|
Mortgage broker |
3 |
4 |
$517,106 |
|
Foreign exchange dealer |
1 |
4 |
$582,640 |
|
Corporate advisor |
1 |
2 |
$795,000 |
|
Credit provider |
1 |
1 |
$1,000 |
|
Make a market |
1 |
1 |
$159,189 |
|
FinTech |
1 |
1 |
$750 |
|
Total |
34 |
318 |
$17,360,846 |
Due to the pause on insolvent financial firms, data in relation to only closed determinations in favour of the complainant does not reflect the full picture and should be considered with open complaints.
