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In its annual review for the financial year ending June 2024, the Australian Financial Complaints Authority (AFCA) revealed a new record for complaints, reaching 104,861, an increase of 8 per cent over the year.
Of those complaints, AFCA reportedly was able to resolve 104,203, 21 per cent more than the previous financial year, with complainants securing $313,903,256 in compensation and refunds.
Chief ombudsman and AFCA CEO, David Locke, said one of the most “concerning trends” over the year has been a “dramatic increase in scam-related complaints, reaching nearly 11,000”.
“In 2023, Australian consumers lost a staggering $2.7 billion to scams, according to the Targeting Scams report by the National Anti-Scam Centre (NASC),” Locke said in the annual review.
“That was down from $3.1 billion in value the previous year, but the volume of scam reports was up 19 per cent to 601,000. AFCA itself saw a surge in scam-related complaints in 2023–24, with a rise of 81 per cent.”
Among the most complained about products during the financial year were personal transaction accounts with 16,551 complaints, followed by credit cards (11,913), motor vehicles/insurance (10,204), personal loans (7,737), and home building at 7,358.
Banking and finance had an especially high level of complaints, rising 12 per cent to 60,076. Complaints regarding financial difficulty rose by 18 per cent to 5,715 as consumers battle with higher interest rates and increased living costs.
Of those complaints, home loans accounted for one in three (1,887).
Other top banking and finance complaints included unauthorised transactions (12,505); ‘other type of scam’ (5,823); interpretation of product terms and conditions (3,876); service quality (3,469); and incorrect fees cost (2,561).
Locke said that the rise in complaints related to financial hardship was another “significant concern” over the year.
“ASIC’s recent review, Hardship, hard to get help – Lenders fall short in financial hardship support, identified significant challenges in accessing financial assistance and revealed that a third of hardship applicants faced so many obstacles that they abandoned their applications,” Locke said.
“This mirrors trends in AFCA’s own complaints data, which shows insufficient support by industry for many individuals in financial difficulty. Complaints in this area were up 18 per cent over the past year, with a substantial portion relating to home loans.”
According to Locke, many complaints were in relation to failures by lenders to properly respond to, or adequately address hardship requests, particularly around smaller lenders and buy now, pay later (BNPL) providers; however, issues among larger lenders were also apparent, for example, automated processes failing to account for individual circumstances.
[RELATED: Lenders need to do better on financial hardship assistance: ASIC]
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