AFCA’s complaints resolution scheme passes $1bn mark
The Australian Financial Complaints Authority (AFCA) has secured $1 billion in compensation and refunds for consumers since 2018 and was on track to receive close to 100,000 complaints this financial year.
As of 30 March 2023, the scheme had resolved more than 320,000 complaints since opening its doors.
“We expect to register close to 100,000 complaints this financial year, up from 70,000 complaints just a year ago. AFCA’s services have, sadly, never been more needed,” said AFCA chief executive and ombudsman David Locke.
“We will continue to work in partnership with financial firms, consumer bodies, and regulators to share lessons from our work and drive improved practices. We want to see financial firms resolve more disputes themselves, so fewer matters have to be escalated to AFCA.”
AFCA’s predecessor schemes, the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal, together accounted for just over 52,000 complaints in their last full year, 2017–18.
Since its launch in November 2018, the financial services ombudsman said it had closed over 320,000 complaints and worked with more than 26,000 people in financial difficulty.
Some 70 per cent of cases were resolved by agreement.
At its member forum in March, Locke had outlined how issues relating to increased scam activity, natural disasters and higher mortgage rates meant 2023 was “set to be another big year for AFCA”.
Complaints related to investment and advice were up 72 per cent for FY23, largely due to the collapse of Dixon Advisory.
AFCA’s board also announced the reappointment of Locke as chief ombudsman, with his second five-year term set to commence on 28 June 2023.
Commenting on his appointment, Locke said: “AFCA plays a very important role in Australia’s financial services system, and it is a great privilege to lead such an amazing group of people who are passionate about access to justice and fairness to all”.
AFCA board chair, Professor John Pollaers OAM, said Locke had “met the challenge of bringing together three separate dispute resolution bodies to build a new, world-class scheme” and led the organisation through a period of significant growth in complaints as a result of the COVID-19 pandemic, natural disasters and scams.
Despite these challenges, it had received a positive report card from the 2021 Independent Review of AFCA, which found it was “performing well” in a difficult environment.
“AFCA provides a vital service,” Professor Pollaers said.
“Consumers, small businesses and financial firms can participate in the financial system with confidence that a robust process is in place in the event of a dispute. The board is delighted that David has accepted our invitation to continue to lead this important work.”
AUTHOR
Rhea Nath
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