80,546 complaints received, $258.6m in compensation awarded
The Australian Financial Complaints Authority (AFCA) has today released its 2019-20 Annual Review, revealing the number of complaints received and closed, the amount awarded to consumers in compensation and refunds, and the ombudsman’s approach to the COVID-19 pandemic.
According to the AFCA Annual Review, between 1 July 2019 and 30 June 2020 AFCA received 80,546 complaints from consumers and small businesses, which is a 14% increase in the monthly average compared to the last financial year.
The ombudsman resolved 76,681 complaints during the 2019-20 financial year, and awarded or obtained $258.6 million in compensation or refunds to complainants.
A majority of complaints (58%) lodged with AFCA in this period related to banking and finance, followed by general insurance (24%), superannuation (9%), investments and advice (6%) and life insurance (2%).
Credit cards were the most complained about product (with 11,628 complaints), followed by home loans (7,608), personal loans (5,722) and motor vehicle comprehensive insurance (4,104).
Despite the increase in complaints, Chief Ombudsman and Chief Executive Officer David Locke said AFCA was able to resolve the majority of complaints quickly, with complaints taking an average of 73 days to reach an outcome.
“Speedy resolution allows consumers to get on with their lives, and AFCA’s process is designed to support all parties to a complaint to reach an agreement as early as possible,” Mr. Locke said.
AFCA’s Annual Review also outlines how the ombudsman approached the COVID-19 pandemic and worked with industry and regulators to support those with financial disputes.
“The coronavirus pandemic is one of the most challenging health and economic crises Australia has ever experienced,” Mr. Locke said. “It has had a significant impact on Australian consumers, small businesses, and the Australian financial services industry.”
“The massive and almost immediate economic impact of job losses and business shutdowns has been felt across the financial services industry, with consumers suddenly in hardship, businesses losing income, and insurance claims and chargeback requests being made as travel plans were cancelled, and superannuation funds rapidly implementing cash payments to thousands of claimants.”
Mr. Locke said AFCA worked hard to respond to the challenge of the pandemic in a flexible and pragmatic way to help complainants and financial firms resolve financial complaints quickly, understanding there were high levels of stress and uncertainty on both sides.
“We especially appreciate the support and cooperation of our members, regulators, industry and consumer groups as we work together to support those in hardship,” he said. “If you are experiencing financial difficulty, we encourage you to call the National Debt Helpline on 1800 007 007 or visiting ndh.org.au.”
For the latest statistics on complaints relating to the COVID-19 pandemic, visit: afca.org.au/news/statistics
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- The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent help with financial disputes.
- AFCA is a one-stop-shop for consumers and small businesses who have a dispute with their financial firm, over things such as banking, credit, insurance, advice, investments or superannuation.
- Where an agreement cannot be reached between parties, AFCA can issue decisions that are binding on financial firms.