The Australian Financial Complaints Authority (AFCA) received 102,790 complaints in 2023, including nearly twice as many scam-related complaints as the previous year. AFCA assisted consumers in recovering $304 million in refunds and compensation.
An AFCA representative has said that banks, superannuation trustees and other financial firms need to do a better job of handling complaints.
Even better, perhaps they could improve their services so there’s less need for customers to complain at all.
The Australian Financial Complaints Authority (AFCA)
AFCA was set up in response to a 2017 review into dispute resolution and complaints in Australia’s financial system.
Before this, financial disputes were resolved by three different schemes: the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
It was a complicated system that didn’t work very well. The introduction of a single financial complaints body also came with fairer rules for consumers and higher limits for claims and compensation.
AFCA‘s role is to resolve complex disputes involving consumers and financial firms. This includes banks, insurers, credit providers, stockbrokers, financial advisers, debt collection agencies and superannuation trustees. Basically, any company whose main business is money.
Some issues AFCA might help with:
- You are experiencing financial hardship and have asked for assistance with managing your repayments or debts with a financial firm, but did not get the support you need
- You need help with recovering incorrect fees or charges, including unauthorised or accidental transactions
- You have been given misleading or incorrect information about a financial service or product
- You gave a financial provider instructions and they were not followed
- Your privacy has been breached
- You are disputing a decision from an insurance company or other financial body, including insurance claims or the payment of a death benefit
Most of the issues AFCA handled in 2023 involved unauthorised transactions, many of which were due to scams.
Scams on the rise
Nearly 9000 complaints to AFCA were scam related, 95% more than in 2022. While there are some things that you can do to help identify and avoid scams, the Australian Government is also stepping up their efforts to protect consumers.
Last year, the ACCC launched the National Anti-Scam Centre which coordinates government, law enforcement, industry and consumer groups to disrupt and prevent scams.
The Australian Communications and Media Authority (ACMA) has recently launched a trial phase of the SMS Sender ID Registry that will make it harder for scammers to impersonate major brands and agencies like banks.
In short, there are things happening to make life harder for scammers – but the pressure is on for banks and other financial providers to step up their game as Australians continue to lose lots of money.
AFCA also saw a 29% increase in complaints relating to financial hardship, reflecting the increased cost of living pressures facing Australians. AFCA fields complaints from individuals and small businesses who are unable to make a repayment on a debt, and whose requests for assistance have been rejected or ignored by the bank.
A survey conducted by CPSA at the end of last year found that just 10% of respondents did not feel stressed about their financial circumstances.
At a time when so many are doing it tough, it is not surprising that more people are asking for some grace from financial institutions, especially when many of these same companies have seen record profits in the past year.
If you are concerned about scams, we recommend checking Scamwatch, CHOICE, and The ACCC’s Little Black Book of Scams.
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