The new Australian Financial Complaints Authority (AFCA) has received 6522 grievances in its first month of operation, which is 60 per cent more than it budgeted for.
Just eight per cent of complaints were about superannuation, compared with 36 per cent about banks.
The authority said it was investigating four “potentially serious contraventions”.
AFCA had asked for sufficient funds to field 1000 complaints about financial products and services in its first week starting on 1 November.
However, after 13,000 telephone inquiries, the authority has been swamped by the number of complaints it has received.
AFCA’s first report comes less than a week after the last hearings of the Royal Commission into Misconduct into the Banking, Superannuation and Financial Services Industry .
The royal commission’s grilling exposed countless examples where banks and other financial institutions had not acted in the best interests of customers by putting profits first.
AFCA last month replaced the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal as the one-stop shop for financial dispute resolution.
Averaging about 310 complaints per business day, it has so far experienced an increase of more than 47 per cent in disputes reported when compared to the three predecessor schemes, the authority said.
More than a third, or 2367, of all complaints were levelled at banks. This was followed by 1159 complaints about general insurers, 1040 about credit providers and 522 about super funds.
“While there has been a high number of complaints initially received by AFCA, less than six per cent of AFCA’s licensee members have had complaints lodged against them in November.
“We want to make sure that members of the public know where to go for help when they have a financial complaint they can’t resolve directly with their financial firm,” chief ombudsman David Locke said.
“AFCA provides quick and easy access to fair resolutions. 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 November have already been finalised,” Mr Locke said.
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).
While most complaints were lodged by individual consumers, 460 complaints were lodged by small businesses.
“Complaints about decisions made by financial firms are the most common reason why consumers and small businesses make complaints to AFCA,” the authority said.
“This includes issues relating to 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.
“Our streamlined processes and systems have dealt well with the level of calls and complaints received. Of the number of complaints lodged, 80 per cent were made online, meaning consumers and small businesses have been able to access our service whenever and wherever they need it,” Mr Locke said.
AFCA is currently investigating 84 definite systemic issues and four potentially serious breaches.
“Systemic issues are identified in a complaint or several complaints, and have an effect on people beyond the parties to a complaint,” he said.
“Because of this, we take our responsibility to identify and investigate systemic issues very seriously. Financial firms should be in no doubt that we will be referring and reporting these to the appropriate regulator.”
AFCA is a free and independent ombudsman service that resolves complaints by consumers and small businesses about financial firms. It was established following the 2016 Ramsay Review into how Australia’s external dispute resolution framework could be improved to deliver effective outcomes.
Consumers and small businesses can lodge a complaint to AFCA online at afca.org.au, via email to [email protected] or by phoning 1800 931 678.
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