A hundred thousand financial services complaints in 2023, up 23% as cost of living surges

Every two minutes, Australians made a complaint about financial services, with reports involving monetary hardship surging as cost of living pressures loomed large.

The Australian Financial Complaints Authority (AFCA) received more than 100,000 complaints from consumers and small businesses between 2022 and 2023, a 23% increase from the year before.

Reports about scams nearly doubled from 4611 to about 9000, while complaints about financial hardship were up 29% on the previous year.

AFCA chief ombudsman and executive David Locke said this reflected the cost of living crisis and increasing interest rates.

“The volume of complaints escalated to AFCA has been increasing at an unsustainable rate,” he said.

Australians complained most about unauthorised transactions, delays in claim handling, service quality, claim amounts and denials of claims, with the latter jumping 50%.

Personal transaction accounts were also a major source of irritation, with the number of reports surging by 64% to 16,028.

In some good news, Australians received more than $304 million in compensation and refunds after lodging complaints, a 38% increase on the previous year.

But Locke said the industry needed to do more to improve customer satisfaction and address frustrations quickly in-house.

“We believe many financial firms could be doing a better job of handling complaints within their own internal complaints processes, so only the most complex cases reach AFCA — which is the role we are meant to play,” he said.

“Instead, the volume of complaints reaching us is putting unnecessary pressure on the external dispute resolution system and inevitably causing further delays for consumers.”

This article was first published by AAP.