Australian Financial Complaints Authority calls on banks, insurers to lift their game

Consumers in dispute with financial firms lodged a record 96,987 complaints - an average of 266 per day - with the Australian Financial Complaints Authority, a rise of more than a third over the previous financial year.

There were 31,699 complaints lodged by people aged 55-plus, up 36 per cent from the previous year. Over-55s accounted for a third of all complaints.

The rise has authority chief ombudsman David Locke "deeply concerned" and calling for a "significant improvement from firms".

Overall, banking and finance complaints rose 27 per cent to 53,638. Within that, complaints involving financial difficulty rose 9 per cent over the year but were up 31 per cent when the June quarter was compared with the same period a year earlier.

Personal transaction accounts overtook credit cards as the most complained about product, with disputes up a massive 86 per cent.

This was partly due to scam-related complaints, which rose 46 per cent to 6048.

"We witness first-hand the human cost of this serious and sophisticated financial crime," Mr Locke said.

"It's pleasing to see initiatives by individual banks to combat scams but we would welcome a more consistent approach across the sector."

Acknowledging the government proposal for codes of practice addressing scams, Mr Locke said the authority believes there is a need for enforceable standards "to lift the bar on scam prevention and remediation".

Recent research by consumer advocate CHOICE showed 80 per cent of Australians agree the government should legally force businesses to do more to stop scams; and 64 per cent agree banks should reimburse people who lose money to scams.

The top issue in complaints to the authority was delay in insurance claim handling (up 76 per cent). Overall, general insurance complaints rose 50 per cent to 27,924.

"We have been raising our concerns about claim delays with insurers for over 12 months now," Mr Locke said.

"It is disappointing that this continues to be a concern.

"While we acknowledge the challenges insurers have faced, the bulk of complaints in the past year were not about natural disasters but about regular claims."

Delay in insurance claim handling was also a significant issue in superannuation. Super complaints rose 32 per cent overall, but within this was a 136 per cent rise in complaints about claim delays, including the payment of death benefits.

Mr Locke urged fund trustees to closely track the progress of claims and review outcomes.

"Access to this money is vital for people who have lost a loved one or are unable to work," he said. "Unnecessary delays and poor communication are distressing."

The authority noted many improvements during the 2022-23 financial year compared to the previous 12 months.

- 86,185 complaints were resolved

- $253.81 million in compensation was provided to consumers through the authority's dispute resolution processes

- The average time to resolve complaints fell from 72 to 69 days.

The Australian Financial Complaints Authority considers complaints about: credit, finance and loans; banking deposits and payments; insurance; investments and financial advice; and superannuation.

Phone 1800-931-678 or click HERE