The Australian Financial Complaints Authority (AFCA) received 104,861 complaints from consumers and small businesses in the 2023-24 financial year, representing an 8% increase over the prior year, according to the agency’s latest Annual Review.
AFCA CEO and chief ombudsman David Locke (pictured) said that the authority successfully resolved 10,440 complaints related to scams, with 70% of these resolved within a 60-day timeframe.
Around 67% of scam cases were settled in the initial stage, where complaints are referred back to the company involved.
For cases that escalated to an AFCA investigation, 60% ended with partial or full compensation. Only 2% of cases proceeded to a final determination by an ombudsman or a review panel.
Scam complaints were a significant concern for the agency over the past year, though the final quarter of 2023-24 saw a notable decline in reported cases.
Although AFCA averaged around 900 scam complaints per month over much of the year, the monthly average dropped to about 500 during the last three months.
Locke attributed some of this decline to initiatives such as the government’s National Anti-Scams Centre and the introduction of account verification measures by certain banks.
He also expressed support for the government’s proposed Scams Prevention Framework, which would introduce mandatory conduct standards for financial institutions.
“AFCA is well placed to deliver external dispute resolution services across the banking, telecommunications, and digital platform sectors if that is what the Parliament endorses,” he said, alluding to a potential expansion of AFCA’s role as a central point of recourse for victims of scams who have unresolved complaints.
Locke urged financial institutions, digital platforms, and telecommunications companies to enhance consumer protections without delay, citing increased security risks as consumers are pushed towards digital payments.
“Much more needs to be done to reduce the operational risk associated with digital payment platforms. We are being required to transition to digital banking; it is the responsibility of the banks to ensure it is safe for us to do so and that the systems properly protect our money,” he said.
Locke also advised financial institutions to adopt a “resolution mindset” to avoid adversarial handling of complaints, particularly in complex scam-related cases.
AFCA’s Annual Review also highlighted a significant 18% rise in complaints related to financial hardship, including customer dissatisfaction with responses to hardship applications.
Complaints linked to home, personal, and credit card lending increased as more consumers reported poor communication and lack of support during hardship cases.
In the general insurance sector, Locke observed persistent growth in complaints, which he associated with rising premiums for car and home insurance.
“Over the past two years, consumers have faced a record level of premium growth in both car and home insurance. Despite this, we remain disappointed with the lack of action regarding appropriate resourcing, product design, and the adoption of a resolution mindset,” he said.
AFCA also recently revealed a substantial rise in complaints from Indigenous Australians.
It recorded a 47% increase in complaints from Aboriginal and Torres Strait Islander (ATSI) customers regarding comprehensive motor vehicle insurance claims. Delays in processing these claims were a significant factor, alongside concerns about financial hardship.
Complaints from ATSI customers overall rose 25% in 2023-24, with AFCA receiving 3,161 cases from Indigenous consumers.
