The Australian Financial Complaints Authority (AFCA) received more than 300,000 complaints in its first four years, with consumers securing nearly $900 million in compensation and refunds.
AFCA opened its doors to consumers on November 1, 2018, as a “one-stop shop” that brings together dispute resolution services offered by three separate organisations. Its services are free for consumers and small businesses, and it is a cost-effective and efficient alternative to court for consumers and financial firms.
Over its first four years, AFCA identified and reported 227 definite systematic issues and severe contraventions of the law to federal regulators, resulting in an additional $280 million in refunds to 6.5 million consumers. During the same period, it resolved 60% of cases in less than 60 days – and two of three cases by facilitating agreement between the two sides.
During the same period, AFCA worked with around 5,000 victims of over 50 weather-related natural disasters and more than 24,000 people experiencing financial difficulty.
AFCA registered more than 17,000 COVID-19-related complaints related to disputes involving financial products such as travel insurance and early release of super amid the pandemic.
It also played a key role in calling out misleading and deceptive conduct in the sales of funeral plans to Indigenous communities, claiming that the consumers were unfairly targeted. AFCA ombudsmen issued 178 decisions, awarding over $1.4 million in refunds and interest, in cases involving Aboriginal Community Benefit Fund (ACBF) companies.
During FY21-22, AFCA saw a dramatic rise in insurance complaints, with the top four insurers accounting for around 9,400 complaints, up 19% from the previous financial year. Most recently, during the catastrophic flooding in Queensland and New South Wales (NSW), the ombudsman service reported receiving around 950 complaints from flood-affected customers.
Commenting on AFCA's performance for its first four years, CEO and chief ombudsman David Locke said: “The past four years have demonstrated the critical role AFCA plays. As we move into a period of heightened economic uncertainty and amid increasing natural disasters, the need for AFCA's services has never been greater.
“As long as the outcomes are fair and just, we think [that] early resolution is good for everyone,” he added. “For [the] industry, it means retaining customers' business and goodwill. For consumers, the sooner a matter is resolved, the better, because financial disputes can be very stressful.”
