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AFCA stats reinforce calls for improved IDR processes
The Australian Financial Complaints Authority (AFCA) has reported a 20 per cent rise in complaints about delays across financial products last year, as politicians call on super funds to improve their practice.
For the first time, AFCA said it has recorded 100,000 complaints in a calendar year, affirming how the volume of complaints escalated to the complaints authority has been “increasing at an unsustainable rate,” according to AFCA chief executive and chief ombudsman David Locke.
While scam-related complaints to AFCA nearly doubled between 2022 and 2023, there were also rises in complaints about other financial products that AFCA covers, which include superannuation, banking and finance, insurance, and investments and advice.
Of the top issues complained about in 2023, delay in claim handling rose 20 per cent to some 10,692, just behind the top spot of unauthorised transactions (12,289). This included complaints about life insurance and insurance in super.
Denials of claims took the fifth spot, noting a 50 per cent rise to 4,791 in 2023.
Locke reinforced that a downward trend in complaints was necessary, particularly for financial firms to address complaints quickly and efficiently in-house.
He said: “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.
“Instead, the volume of complaints reaching us is putting unnecessary pressure on the external dispute resolution system and inevitably causing further delays for consumers.”
Last year, Anne Maree Howley, senior ombudsman at AFCA, said the Minister for Financial Services Stephen Jones spoke with the body on 15 November about growing concerns around complaints handling in super.
Speaking at a member forum session in November, she said: “He noted that the superannuation industry had done an excellent job in producing accumulated wealth for retirement for its members. However, he was not so complimentary about the level of service, consumer support, and consumer redress for members the industry is providing.
“In particular, he spoke again of his concerns in relation to the increase in AFCA superannuation complaints. Delays in claim handling create an issue for those who are at their most vulnerable.”
The same month, Jones called on super funds to “lift their game” with material, meaningful changes and had not ruled out regulatory levers to do so.
“Look, we won’t rule out looking at regulatory levers. I’d rather not, to be honest. I don’t want the government to be in a paternalistic position where we’re saying, ‘Well, dear fund, can you please pick up the phone and answer those questions?’ or ‘Can you please ensure that inquiries are being dealt with in a reasonable time frame and can you ensure that insurance claims are being dealt with, particularly the really tough ones in somebody’s life, like a death or permanent disability claim’,” he told ABC Radio.
“These things have got to be dealt with sensibly and quickly, and too often they’re not. So, we won’t rule out looking at what regulatory levers are available.”
AUTHOR
Rhea Nath
Rhea L Nath is a journalist on Super Review and InvestorDaily, with a focus on funds management, superannuation, and institutional investment. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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