Over 17,000 AFCA complaints received during the pandemic
Since 11 March 2020, the Australian Financial Complaints Authority (AFCA) has registered 17,403 COVID-related complaints relating to banking, insurance and other financial services.
Three years later, the World Health Organisation (WHO) declared the global emergency phase of the pandemic over on 5 May 2023.
AFCA said consumers had received $21.6 million in total compensation or refunds during the period.
The 17,403 complaints about financial products or services represented 7 per cent of all complaints AFCA received over those three years.
One in four, or 4,368 COVID-related disputes, involved the manner in which a firm responded to a customer’s financial difficulties.
Travel insurance received the most complaints of any product, with 3,859 COVID-related disputes. Credit cards followed with 2,703 complaints, alongside home loans with 2,254.
More than 1,400 complaints were made about superannuation following the government’s decision to allow eligible individuals to withdraw up to $10,000 from their super accounts.
“While not seeking to downplay what people went through, we received far fewer COVID-related complaints than we thought might arise from the pandemic,” said David Locke, AFCA’s chief ombudsman and chief executive.
He noted that banks were typically quick to respond by providing emergency support during a time of unprecedented repayment deferral requests.
“It shows what’s possible when firms and consumers talk to each other. We hope financial firms have a similar mindset as we face new challenges amid rising interest rates and cost-of-living pressures.”
Small businesses accounted for 9 per cent of COVID-related complaints, despite them generally representing 5 per cent of regular AFCA complaints.
On a state level, NSW equated to 30 per cent of all complaints during the pandemic, with 5,206 disputes.
Overall, the financial services ombudsman resolved 97 per cent of all COVID-related disputes. Nearly 80 per cent of cases reached an agreement or were in favour of the complainant.
On 9 May, AFCA announced its appointment of Shail Singh as lead ombudsman for investments and advice, promoting him from an interim appointment.
“Shail brings deep and diverse experience to this role, having worked in dispute resolution for over a decade and having been a financial planner himself,” said June Smith, deputy chief ombudsman.
Singh was a lawyer by profession and previously worked as an in-house legal counsel and for regulators. After then working as a financial planner at ARA Consultants, he became a case manager with an AFCA predecessor, the Financial Ombudsman Scheme, in 2010.
In 2018, Singh was appointed as an ombudsman when AFCA was first established. Later in 2021, he started a new position as senior ombudsman for investments and advice.
AUTHOR
Jasmine Siljic
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
