Aussies paid $900m under new financial complaints body
Australians have taken home almost $900 million in compensation and refunds since the ombudsman service opened its doors in November 2018.
The Australian Financial Complaints Authority (AFCA) says it's also handled more than 300,000 disputes, an average of 200 complaints per day, over the past four years.
AFCA explained banks, general insurers, credit providers, super fund trustees and or advisers as well as underwriting agencies generate the most complaints.
The one-stop-shop for disputes added the highest level of product complaints related to credit cards, home loans, personal transaction accounts, personal loans, and MV - comprehensive insurance.
AFCA says the top five issues by product line are delay in insurance claim handling, insurance claim amount, denial of an insurance claim (exclusion and or condition), failure to respond to a request for assistance (credit), as well as unauthorised transactions relating to deposit taking.
"The past four years have demonstrated the critical role AFCA plays," says its chief executive and chief ombudsman David Locke.
"As we move into a period of heightened economic uncertainty, and amid increasing natural disasters, the need for AFCA's services has never been greater."
Further AFCA has reported an estimated 227 systemic issues and serious contraventions of the law to federal regulators, resulting in an additional $280 million in refunds to 6.5 million consumers.
Locke commented that AFCA would prefer that complaints never reached it, but if they do the best outcome for everyone was an early resolution by agreement.
"As long as the outcomes are fair and just, we think early resolution is good for everyone," he says.
"For industry, it means retaining customers' business and goodwill. For consumers, the sooner a matter is resolved the better, because financial disputes can be very stressful."
Locke added that AFCA's role is not just in resolving disputes but also about working with the financial services industry to help it improve practices
A Treasury-led review found AFCA was "performing well in a difficult operating environment and a changing regulatory landscape."
This year it introduced a new funding model that has been welcomed for its fair, user-pays approach.
Locke says AFCA was not sitting still and would continue to enhance its service for consumers and firms.
"Using the recommendations from the review to inform projects already underway as well as new initiatives," he says.
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