In the 2022 – 2023 financial year, the Australian Financial Complaints Authority (AFCA) received a record 96,987 complaints, being a 34% increase from the previous year.
According to AFCA, the increase in complaints could be attributed to a number of factors, including:
- Growing financial stress in the community related to rising interest rates;
- The continued burden of scams; and
- Issues with insurer claims handling.
Banking and Financial Firms
Over the 2022 – 2023 period, banking and finance complaints rose 27% and within that, complaints involving financial difficulty rose 9%. Mr Locke is encouraging firms to improve their procedures for assisting customers dealing with financial hardship, including implementing steps to identify and support these customers at an earlier stage.
If your firm deals with customers experiencing financial hardship, ensure you have a Hardship Policy in place. Credit Licensees can purchase our template Hardship Policy here or, if you are a financial services licensee, you can purchase our template Vulnerability and Financial Hardship Policy here.
Insurance Claims Handling
The most common complaint received in the 2022-2023 period was in relation to delays with insurance claims handling. The number of complaints relating to insurance claims rose by 76%.
Mr Locke has stated “it is disappointing that this continues to be a concern. While we acknowledge the challenge insurers have faced… we would like to see insurers take the necessary steps to ensure fewer policyholders have to complain to AFCA”. Delays in insurance claims handling, was also a prominent issue in a number of superannuation complaints. It is reported that there was a 136% increase in complaints relating to claim delays, including life insurance payments and total and permanent disability insurance payments.
Although AFCA was able to provide $253.8 million in compensation and refunds to consumers, it is asking firms to improve their processes.
If you need assistance with your complaints management processes or guidance on how to better assist your customers, please contact us.