Australia’s banks are being pressured to do more, with a new report showing a rise in complaints about financial institutions. The Australian Financial Complaints Authority (AFCA) has released its latest figures, which show complaints have reached record numbers.
The number of complaints delivered to the ombudsman jumped 9 per cent in the 2023-24 year, totalling more than 105,000. This follows a rise of monumental proportions in 2022-23, a staggering 34 per cent increase.
Despite the increase being less steep this year, chief ombudsman David Locke expressed disappointment in the numbers.
“While we haven’t seen the scale of increase we experienced a year ago, these record numbers are still too high,” he said. Mr Locke said he believed financial institutions needed to do more to prevent complaints being escalated to the ACFA.
“We are disappointed we haven’t seen a reduction,” he said. Our view is that firms could be resolving more complaints themselves, or preventing them in the first place.”
Mr Locke said the ACFA had taken steps to cope with increasing demand, but this was not the best solution.
“It’s in everyone’s interests that rising complaints are tackled at the source,” he said.
A breakdown of complaints in Australia
It’s worth noting that the huge number of complaints to the ACFA – 105,454 to be exact – we’re not all against banks. For instance, there was a big spike in complaints about comprehensive motor vehicle insurance.
Nevertheless, banking and finance complaints rose 11 per cent to 59,636, a sizeable chunk of the overall figure.
Sadly, scams were another area that experienced a dramatic jump in complaints. Scam-related complaints rose 81 per cent to 10,951 in 2023-24. That’s an average of 913 a month, compared with 504 a month in the 2022-23 financial year.
However, despite that disturbing jump, Mr Locke said there were signs of light at the end of the tunnel. “We saw scam-related complaints dip a little towards the end of the year,” he said. This might be a reflection of recent government and industry efforts to prevent and tackle scams, he believes. “Our hope is that this improvement continues in the coming year.”
Meanwhile, the number of complaints about insurance companies showed mixed trends. The rate of increase in general insurance complaints moderated in 2023-24, although this was hardly surprising. It had jumped by 50 per cent in 2023-24.
Motor vehicle insurance raised the hackles of many consumers in 2023-24. There was a 21 per cent surge in complaints about comprehensive motor vehicle insurance.
The problem with banks
The five most complained about products were personal transaction accounts, credit cards, personal loans, home loans and online accounts. Of those, the home loan category was the only one that had a drop in complaints, down 3 per cent.
Personal transaction accounts were the clear ‘winner’, accounting for 16,365 complaints, a 19 per cent increase on 2022-23. Online accounts came fifth on the most-complained list by volume (2533) but had the sharpest increase – 33 per cent.
Many of these account complaints comprised a crossover with scam complaints. Indeed, the most common issue in complaints to AFCA was “transactions that customers considered unauthorised”.
Last year, the Australian Securities and Investments Commission called on banks to do more after finding they “detected and stopped a low proportion of scam payments made by their customers”.
The latest figures would suggest the banks have not yet heeded that call.
Have you had reason to make a complaint against a bank recently? Was it satisfactorily resolved? Let us know via the comments section below.
Also read: Branch closures and bank scams – is there a link?
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Mine is a positive story. After switching to AMP Bank recently, because the interest rate is good, I paid out a substantial deposit to a company I was buying a product from. AMP Bank blocked the transfer and an employee phoned me, instructing me to call the number on the AMP Bank website because she did not want to request I identify myself on an incoming call. When I phoned back, I was asked had I visited the premises of the company I was paying, met the people I was paying, checked that the product was genuine, and verified carefully that the account data I had used to make the transfer matched with their bank account details. When I confirmed I had taken all the relevant precautions, they let the transfer go through. It caused a little inconvenience, as I had to phone the supplier and advise that there would be a short delay in them receiving the funds, but it was worth it. I am impressed and very grateful.
I have had issues with fraudulent credit card transactions on several occasions – all but one sorted favourably, but it angered me that NAB only refunded half of one fraudulent transaction despite their terms of trade promising to refund in full if I didn’t authorise the payment. There was one I had to resort to police intervention to resolve. The only issue I’ve had with a bank was with a Suncorp joint account that someone tried to transfer money from. The bank’s security system stopped them, thankfully, despite them making 8 attempts. Suncorp increased their security after that incident. They introduced two-factor identification. But my accountant now tells me even that isn’t secure anymore. Apparently hackers can get around it. Scary!