The Australian Financial Complaints Authority has expressed disappointment at another record year of complaints, after disputes reaching the ombudsman service rose a further 9% to more than 105,000 in 2023-24. However, life insurance and financial advice complaints do not appear to be a factor.
Notwithstanding more detailed data sets are still to be released, the lack of any reference to life insurance or financial advice complaints in this summary release would tend to indicate these areas constitute a very minor proportion of the complaints managed by the regulator.
AFCA’s preliminary data snapshot showed scams were a key driver, along with a surge in complaints about comprehensive motor vehicle insurance, contributing to record complaints in the banking and finance and general insurance sectors.
In its 2022-23 Annual Review AFCA said it received 1,898 life insurance complaints, which made up 2% of the nearly 97,000 total complaints it received that year (see: Jump in Complaints About Delays in Claims Handling).
“While we haven’t seen the scale of increase we experienced a year ago, these record numbers are still too high,” Chief Ombudsman David Locke says of the 105,454 complaints in 2023-24. This followed an unprecedented 34% jump in complaints a year earlier.
Banking and finance complaints rose 11% to 59,636 and general insurance complaints 4% to 29,096, as of the preliminary snapshot at June 30.
AFCA says scam-related complaints rose 81% to 10,951 in 2023-24, averaging 913 a month compared with 504 a month the previous financial year.
Locke noted that AFCA had started to see instances of sophisticated scam activity in the superannuation sector.
AFCA was set up as an ombudsman to protect Advice clients from poor advice, poor product selection and now apparently, financial product failure, à la Dixon URF this.The underlying principle is that the complainant's originally sought advice and did not receive what they paid for, and therefore need remediation
AFCA really shouldn't be looking at scams. Scams are the byproduct of greedy Victims not thinking things through or not asking obvious questions or better still, getting professional advice from licensed (not "qualified" ) advisers. Primarily these Victims are folks who think they know better than professionals, and want to deal direct with the provider, and not pay an advice fee.
Some of Ms Caddick's clients, for instance, clearly had incentives to hide their investments and more importantly the returns from the ATO.And then there's all those sophisticated investors in New York who worked out what Bernie Madoff was up to but wanted to stay just a little bit longer so they could pull some of in his fantastic returns.
Good luck to them and all the ships they sail in!
The way this AFCA press release has been formulated, it's essentially a wide-ranging, all-purpose attack on advisers. Nothing new there, it's de rigueur
I have a sense that the folks running AFCA have been drinking from the same Kool-Aid bottle as Mr Jones, having watched his recent appearance at the National press club where he rambled on about scams, while failing to admit that scams are successful because they appeal, at their most basic, to the Inherent greed In some people who don't wish to be left out of anything that looks too good.
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