Record number of complaints taken to AFCA in 2022-23

96,987 complaints were lodged with the Australian Financial Complaints Authority (AFCA) over the past 12 months, making this a record increase of 34% when comparing complaints from the previous financial year.  

AFCA’s Chief Ombudsman and Chief Executive Officer, David Locke, said the rise reflected growing financial stress in the community, the continued scourge of scams, and issues with insurer claims handling. 

“We are deeply concerned by the volume of complaints consumers are having to escalate to AFCA,” Mr Locke said. “It’s not fair on consumers and not good for business. We need to see a significant improvement from firms.” 

Impact of financial stress a visible marker 

The impact of financial stress due to rising interest rates and the increase in the cost of living are clear markers in complaints received in the final quarter of the financial year.  

Overall, banking and finance complaints rose 27% to 53,638 in 2022-23. However, this figure rises to 31% when we look at the June quarter of this year as compared to the same period last year.  

“We want to see banks and other finance providers continue to take active steps to identify and support customers who are experiencing financial difficulty,” Mr Locke said. 

Rise in scam-related complaints and the need to regulate BNPL  

Scam-related complaints rose by a staggering 46%, with complaints totalling 6,048.  

“We witness first-hand the human cost of this serious and sophisticated financial crime,” Mr Locke said. “It’s pleasing to see initiatives by individual banks to combat scams, but we would welcome a more consistent approach across the sector.”  

Mr Locke welcomed the government proposal for codes of practice addressing scams. “AFCA believes there is a need for enforceable standards, to lift the bar on scam prevention and remediation. This will also aid the work we do as an ombudsman service.” 

Mr Locke would also like to see buy now pay later (BNPL) forms of credit to be regulated and supports the Federal Government’s intention to introduce regulation in this area.  

Mr Locke noted people were turning to other forms of credit to manage tight budgets. 

“This underlines the importance of the federal government’s plan to regulate BNPL under the National Consumer Credit Act, and recent reforms addressing what’s known as ‘payday’ lending,” he said.  

BNPL complaints rose 57% in the past 12 months.  

Insurance claim handling is a major issue 

The top issue in complaints to AFCA in 2022-23 was delay in insurance claim handling, up 76%. Overall, general insurance complaints rose 50% to 27,924.  

“We have been raising our concerns about claim delays with insurers for over 12 months now,” Mr Locke said.  

“It is disappointing that this continues to be a concern. While we acknowledge the challenges insurers have faced, the bulk of complaints in the past year were not about natural disasters but about regular claims. We would like to see insurers take the necessary steps to ensure fewer policyholders have to take a complaint to AFCA.” 

Delay in insurance claim handling was also a significant issue in superannuation. Super complaints rose 32% overall, but within this was a 136% rise in complaints about claim delays, including the payment of death benefits. 

In 2022-23, consumers secured $253.8 million in compensation and refunds after coming to AFCA.