AFCA is “very concerned” that so far in 2024 complaint volumes are already far ahead of the same period last year, including complaints about delays, service quality and communication disputes across insurance and superannuation.
In a speech to an AFCA Member Forum, Chief Ombudsman and CEO David Locke notes that this volume of complaints meant they were seeing the same challenges and complaint issues that shaped the 100,000+ complaints received in 2023 continue:
- Delays, service quality and communication disputes across insurance and superannuation
- Sophisticated scams and financial crime
- Natural disasters and their devastating impact
- Complaints across credit products
- Increased levels of financial hardship
Locke noted AFCA did not wish to be handling complaints “…generated by poor communication, by delay, or by poor complaint and dispute handling,” (see: Jump in Complaints About Claims Handling Delays).
But, he says, unless industry does a better job “…consumers will continue to be so frustrated that they escalate matters to us because they feel they have no alternative.”
He says the authority would much rather see its members “…invest more in internal dispute resolution (IDR) and resolve these complaints fairly at source, rather than for AFCA to have to continue to grow and expand and then pass on those costs to members.”
Locke notes that such unprecedented volumes have put pressure on AFCA’s service. At first it monitored complaint volumes to understand if such growth was an aberration or if it was entering a ‘new normal’.
“After more than 18 months of consistently high numbers, it’s evident this growth is sustained – and something we must all act on to address.”
He says the organisatiion has engaged heavily with members and industry representatives from the sectors that are contributing most to the escalating numbers of complaints.
…We are encouraged by the steps some members have taken to address this – particularly by some of the larger insurers…
“We are encouraged by the steps some members have taken to address this – particularly by some of the larger insurers, where we have seen some good progress. But it has not been consistent across the sector, or the rest of the financial services sector, so we need to see further improvements.”
He also noted AFCA was encouraged that 70% of members “…often do not have complaints lodged against them at all, and we want to acknowledge those firms that are taking steps to improve their complaints performance.”
CSLR – A Step Forward for Consumer Protection
With regards to the opening of the Compensation Scheme of Last Resort, he says AFCA sees this as “…a step forward for consumer protection in Australia.”
It is currently working through the backlog of previously paused complaints from before the CSLR legislation was passed and has “…reviewed many of these complaints to determine at a high level how many may be within scope of the CSLR.”
Now that the CSLR legislation has passed, AFCA has also restarted its investigation into the nearly 2,000 complaints it received against Dixon Advisory, which it paused after the firm was placed into voluntary administration in January 2022.
He notes it is prioritising these complaints “…and have doubled the size of our Investments and Advice team to accelerate this important work.”
AFCA also recently published a lead decision that considers core issues and principles ”…and will help us progress this batch of [Dixon Advisory] complaints. This follows extensive industry consultation and finalising an AFCA Approach to determining compensation in complaints against financial advice firms.”
