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More than 70,000 financial complaints were received over the last 12 months, down by 12 per cent compared with the 2019–20 financial year.
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AFCA receives more than 70,000 financial complaints for 2020–21
06 July 2021
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10 minute read
The Australian Financial Complaints Authority (AFCA) on Monday revealed that it had received 70,510 financial complaints for the 2020–21 financial year, most of which were related to credit cards, which accounted for 14 per cent of all complaints.
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Of the complaints related to credit cards received by the authority, the most common issues were “default listings” and “unauthorised transactions”, the latter accounting for 11 per cent of card complaints.
Credit card complaints were followed closely by those related to home loans, at 9 per cent, and personal transaction accounts, at 8 per cent, up by 48 per cent on last year’s figures. Of the complaints related to personal transaction accounts, some 29 per cent were about unauthorised transactions — a figure of concern for the authority.
Complaints related to online banking also rose, this year by 76 per cent, with unauthorised transactions again accounting for a sizeable portion of those, at 28 per cent, along with mistaken internet payments, at 19 per cent.
According to AFCA chief ombudsman David Locke, the authority doesn’t attribute a single explanation to the rising rate of unauthorised transaction complaints.
“There’s no single reason for these increases but people transacting online more during COVID will have contributed,” Mr Locke said. “Scams, which have accelerated during the pandemic, are also leading to growing complaints about transactions.”
Another area of concern for the authority over the last 12 months has been about complaints related to the sale of funeral insurance in Indigenous communities, which Mr Locke noted was “troubling”, where one provider accounted for 98 per cent of all complaints.
“There’s a pattern of poor conduct in regional and remote communities that’s concerning,” he said.
Elsewhere, though, complaint levels have dropped. The 2020–21 financial year saw just 8,303 COVID-related complaints, up from 5,013 in the four months at the end of 2019–20 after the pandemic was declared. That translates to an average of 692 per month, down from the monthly average of 1,253 recorded from March through June last year.
The authority reported that complaints related to travel insurance were down by 22 per cent, as Australians were kept onshore, while superannuations recorded a dip, too, this time of 31 per cent, which AFCA attributes to the end of the federal government’s early access to super scheme, which coincided with the spike seen last year.
Mr Locke said a steadying Australian economy complemented by government support measures and sustained business relief had a positive effect on complaint levels over the last 12 months, which were 12 per cent lower than they were in the 2019–20 financial year.
“Significantly, complaints involving financial difficulty were down nearly 40 per cent from the numbers we saw the previous year,” Mr Locke said. “That’s a great outcome and reflects the positive response from government and industry to the impact of COVID.
“However, it’s too early to say we’re out of the woods yet. It may be some months before we know the full impact of the end of government emergency support and assistance from financial firms such as deferred loan repayments. And, of course, we are still living with COVID-19.”
The authority’s resolution success rate this year was 70 per cent, 60 per cent of which was reported to have been resolved within 60 days. AFCA said that it had secured more than $240 million in compensation and refunds, along with fee waivers, debt forgiveness and apologies on behalf of Australians.
These latest figures bring AFCA’s total compensation procurement to about $610 million in refunds, and more than $220 million in remediation payments since the authority was established in late 2018.
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