Australia’s new dispute resolution body registers steep increase in financial complaints
AFCA has so far experienced a rise of more than 47% in complaints received, when compared to the three predecessor schemes.
The Australian Financial Complaints Authority (AFCA), which officially opened for business on November 1, 2018, has earlier today provided some data about the work done during its first month of operations.
AFCA reports it received over 13,000 phone enquiries in its first month of operation. The new financial dispute resolution body has received so far 6,522 complaints from consumers and small businesses, about financial products or services.
Averaging about 310 complaints per business day, AFCA has so far marked a rise of more than 47% in complaints received, when compared to the three predecessor schemes.
CEO and Chief Ombudsman David Locke commented that the number of calls and complaints is in line with what AFCA was expecting. “We want to make sure that members of the public know where to go for help when they have a financial complaint they can’t resolve directly with their financial firm,” Mr Locke added.
Most of the complaints AFCA has received have been about credit (45%), followed by general insurance (21%) and deposit taking (10%).
The most complained provider type were banks with 2,367 complaints, followed by general insurers (1,159 complaints) and credit providers (1,040 complaints). While there has been a high number of complaints initially received by AFCA, less than 6% of AFCA’s licensee members have had complaints lodged against them in November.
AFCA is currently investigating 84 definite systemic issues and 4 potential serious contraventions and other breaches.
“Systemic issues are identified in a complaint or several complaints, and have an effect on people beyond the parties to a complaint. Because of this, we take our responsibility to identify and investigate systemic issues very seriously. Financial firms should be in no doubt that we will be referring and reporting these to the appropriate regulator,” said Mr Locke.
The new body has taken over from the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
Financial firms including AFS licensees that provide financial services to retail clients, credit licensees, most credit representatives, superannuation trustees and unlicensed product issuers are required by law to join AFCA. Some other firms operating under a licensing exemption may also be required to join the Australian Financial Complaints Authority (AFCA), including firms operating in the regulatory sandbox. The firms should have done so by September 21, 2018.