AFCA home loan complaints target lenders

Data released by the Australian Financial Complaints Authority (AFCA) has revealed the financial services ombudsman received and progressed 2,201 complaints about home loans between July and December 2019, or an average of 367 per month.

Of these, 93.5 per cent of the complaints were made against different types of lenders including banks, credit providers, non-bank lenders, credit unions, and building societies.

According to data released on AFCA’s tool, Datacube, banks were subject to the largest number of complaints, with 1,810 lodged against them, or 82.3 per cent of all complaints.

Credit providers were slapped with 168 complaints or 7.6 per cent of total complaints about home loans, while non-bank lenders received 46 complaints.

On the other hand, AFCA received only 15 complaints against mortgage brokers, which comprised of 0.7 per cent of all complaints about home loans.

AFCA’s Datacube also showed that in the period between November 2018 and June 2019, the authority received 2,437 complaints about home loans, averaging around 309 complaints a month.

According to the data, the number of mortgage complaints rose by 20 per cent in the last six months of 2019, when compared to the average monthly figure in the previous reporting period.

However, it should be noted the previous reporting period covered a period of eight months from November 2018 to June 2019, while the current reporting period covered six months from July to December 2019.

AFCA chief operating officer Justin Untersteiner said he was disappointed to see the increase.

“There has been a dramatic increase in complaints about home loans,” he said.

“This increase has been driven by financial firms failing to respond to requests for assistance, the conversion of loans from interest only to principal and interest and issues with responsible lending.”

He however added that making the data available to the public was an important step in increasing transparency.

“Rebuilding trust in the Australian financial services will be a long journey and one that requires effort across the entire sector,” he said.

“Transparency is key in this transformation and we have made significant changes in the way we report our data and decisions to make them more accessible to the public.”

More broadly, out of all 19,696 complaints received and progressed by AFCA throughout the six-month period across all product types, only 45 of these, or 0.23 per cent, were against mortgage brokers.

[Related: Banks bear brunt of AFCA complaints]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.