Financial complaints skyrocket: Hundreds of businesses spill the beans to new watchdog AFCA

Aussie small businesses and consumers are spilling the beans on their financial services grievances in record numbers since the launch of a new watchdog last month.

The Australian Financial Complaints Authority, which opened for business in November, has fielded a total of 6,522 complaints so far, 460 of which were from small businesses.

The figures represent a 47% increase in complaints compared to AFCA’s three predecessor schemes combined, suggesting that fed up banking and financial services customers are becoming more outspoken.

Small business complaints compared to those previously received by the Financial Ombudsman service have more than doubled, an AFCA spokesperson confirmed, largely due to an influx of complaints from the Viewable Media scandal.

“With the expanded jurisdiction to deal with small business complaints, however, we anticipate that the number of complaints received will continue to be higher than those received by the predecessor schemes,” the AFCA spokesperson said.

The most common complaints from small businesses were about misleading product and service information, while overall 84 “definite systemic issues” were identified by AFCA and are being investigated.

Banks were the biggest culprits, responsible for 2,367 complaints, followed by general insurers (1,159) and credit providers (1,040).

The authority had expected an influx of complaints in its first month, particularly given public anger arising from the Banking Royal Commission, and has already committed to creating a dedicated desk for small businesses.

“This number of calls and complaints is on par with what we were expecting,” said chief executive and chief ombudsman David Locke.

A dedicated small business ombudsman for AFCA has yet to be appointed, but it is hoped someone can be locked in before the end of the year.

Locke said systemic issues were being taken seriously.

“Financial firms should be in no doubt that we will be referring and reporting these to the appropriate regulator,” he said.

“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.”

A total of 13,135 calls were made to AFCA’s consumer line and 143,380 hits were recorded on its website.

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