Australians facing financial stress, scams and insurance delays have triggered the biggest rise in reports to the nation's financial complaints organisation.
People lodged almost 97,000 cases with the Australian Financial Complaints Authority (AFCA) in 2022/23 over disputes with financial organisations, a bump of more than one-third over the previous 12 months.
AFCA chief ombudsman David Locke expressed concern over the volume of complaints people are escalating to his organisation, and said it reflected the growing financial stress in the community.
“It’s not fair on consumers and not good for business,” he said.
For the first time since AFCA's inception five years ago, personal bank transaction accounts overtook credit cards as the most complained-about product, with an 86 per cent spike in reports.
This was partly because of scam-related complaints, which rose by almost half in a year.
The Financial Rights Legal Centre's director of casework, Alexandra Kelly, said banks had inconsistent approaches to scam victims, providing little to no assistance to people experiencing one of the worst days in their life.
"Banks pass the buck, victim-blame and essentially throw up their hands claiming there is little they can do after the fact - or worse, seem to delay and obfuscate," she said.
Banking and finance complaints rose by more than one-quarter over the year, with people facing more pressure with home loans and credit card debts.
There has been a significant rise in the number of people turning to other forms of credit - including buy now, pay later platforms - to manage tight budgets, leading to a 57 per cent jump in complaints, the ombudsman said.
Ms Kelly expects this to worsen in the coming six to 12 months.
Insurance handling delays topped the list of customer complaints, up by 76 per cent.
Financial Counselling Australia’s disaster recovery co-ordinator Peter Gartlan was not surprised with the spike in AFCA complaints, after his organisation received a huge increase in insurance delay complaints from communities hit hard by disasters.
There was a significant jump in insurance delays relating to superannuation, including payment of death benefits, which more than doubled.
"Unnecessary delays and poor communication are distressing," Mr Locke said.
Australians were able to secure more than $250 million in compensation and refunds after complaining to the authority.
