New financial services watchdog flooded with complaints
A NEW financial services watchdog set up to protect consumers from unscrupulous operators has been flooded by complaints in its first month of operation.
The Australian Financial Complaints Authority received more than 13,000 phone inquiries since opening on November 1, logging 6522 complaints about financial products or services.
Averaging about 310 complaints per business day, AFCA has so far experienced an increase of more than 47 per cent in complaints received compared to the three predecessor schemes.
CEO and chief ombudsman David Locke said the body had anticipated the high demand.
“AFCA provides quick and easy access to fair resolutions,” he said. “This is part of our role in rebuilding trust in the financial services sector.
“In fact, while we have only been operating for a month, 15 per cent of the complaints we received in the month of November have already been finalised.”
Most of the complaints AFCA has received have been about credit (45 per cent), followed by general insurance (21 per cent) and deposit taking (10 per cent).
Eight per cent of complaints received were about superannuation.
While most complaints were lodged by individual consumers, 460 complaints were lodged by small businesses.
The most complained provider type were banks with 2367 complaints, followed by general insurers, with 1159 complaints and credit providers with 1040 complaints.
Complaints about decisions made by financial firms are the most common reason why consumers and small businesses make complaints to AFC, with those decisions including denial of insurance claims and responsible lending.
Service issues, such as service quality, delay in claim handling or delay in complaint handling are the next most common issues.
“80 per cent of complaints have been lodged online, meaning consumers and small businesses have been able to access our service whenever and wherever they need it,” Mr. Locke said.