The Australian Financial Complaints Authority (AFCA) has had its work cut out for it in the wake of the banking and financial services royal commission, having already awarded around $185 million in payouts from 73,272 complaints heard in its inaugural year.
According to AFCA, complaints ranged from issues with credit reporting, irresponsible lending, incorrect super and life insurance fees, denial of claims and unauthorised transactions.
The authority said the largest number of complaints were directed at banks (25,826), followed by general insurers (14,139) and credit providers (10,327).
However, superannuation funds or advisers came in fourth, with 2999 complaints, followed by debt collectors and buyers in fifth spot with 2902 complaints.
Superannuation received nine per cent – or one in 10 of all complaints – mostly for incorrect fees or costs (873 complaints), delays in claim handling (770 complaints), account administration errors (492 complaints), denial of claims (437 complaints) and incorrect claim amounts (402 complaints).
The five funds that received the most complaints were:
- AustralianSuper Pty Ltd (227 complaints, 122 resolved)
- AMP Superannuation Limited (193 complaints, 99 resolved)
- Nulis Nominees (Australia) Limited, including DPM Retirement Service, MLC Pooled Superannuation Trust, MLC Super Fund, MLC Superannuation Fund, and Premiumchoice Retirement Service (159 complaints, 61 resolved)
- Retail Employees Superannuation Pty Ltd (140 complaints, 53 resolved)
- OnePath Custodians Pty Limited (83 complaints, 25 resolved)
Credit companies received 44 per cent of all complaints.
The big number of complaints has resulted in AFCA creating a new position – lead ombudsman-systemic issues and remediation – to investigate 50 systemic issues in the banking and financial system.
AFCA chief and chief ombudsman David Locke said: “Our systemic issues work gives us the opportunity to help financial firms fix issues that cause complaints and prevent more from occurring. It also helps raise industry standards and prevents harm to consumers.
“The creation of the new position of lead ombudsman-systemic issues and remediation demonstrates that we take our role in identifying and resolving systemic issues very seriously.
“In the last 12 months, AFCA has identified and resolved 167 definite systemic issues. We also referred 30 possible serious contraventions to regulators.”
AFCA is currently recruiting a lead ombudsman to tackle inherent problems in superannuation, investments and advice.
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