Australian Financial Complaints Authority
- AFCA resolved more than 10,000 scams complaints in 2023-24
- 70 per cent of scams complaints were resolved within 60 days
- Monthly average of scams complaints to AFCA turned downwards
AFCA’s Annual Review shows the ombudsman service received a record 104,861 complaints from consumers and small businesses in 2023-24, up 8 per cent on the year before.
Releasing the Annual Review, CEO and Chief Ombudsman David Locke noted that AFCA had resolved 10,440 complaints where consumers had been scammed out of money, with 70% of these scam cases resolved within 60 days.
Some 67% of scam complaints were resolved at the very first stage of the AFCA process, when it refers matters to the firm. Of the complaints that were not resolved by firms at that first stage and so progressed to investigation at AFCA, 60% resulted in full or partial compensation. Only 2% went to determination by an ombudsman or panel of decision makers.
While a surge in scams complaints was one of the most worrying trends in the past financial year, AFCA saw a welcome downwards turn in the last quarter of 2023-24.
“This is encouraging, but definitely not a cause for complacency”, Chief Ombudsman David Locke said.
“Although AFCA received on average 900 scam complaints a month in 2023-24, that tells only part of the story, because we saw much lower figures over the last three months of the year. Pleasingly this trend had continued into the new financial year, with AFCA receiving an average of 500 complaints a month, significantly lower than in the same period last year.
“It appears that initiatives such as the Federal Government’s National Anti-Scams Centre and steps like account name checking by some of the banks are starting to have an impact,” Mr Locke said. “But there is still a long way to go, and we welcome the Government’s announced Scams Prevention Framework, with strong mandatory codes of conduct.
“AFCA is well placed to deliver external dispute resolution services across the banking, telecommunications and digital platform sectors if that is what the Parliament endorses,” Mr Locke said, referring to the government’s intention for AFCA to be the single point of access for victims of scams who can’t resolve their complaint directly with a firm.
“In the meantime, banks, digital platforms and telecommunications companies should not wait but act now to protect consumers. Much more needs to be done to reduce the operational risk associated with digital payment platforms. We are being required to transition to digital banking; it is the responsibility of the banks to ensure it is safe for us to do so and that the systems properly protect our money.”
Mr Locke also called on firms to approach all complaints with a resolution mindset rather than taking an adversarial position with consumers – especially in a complex area such as scams.
In a recent scam decision AFCA ordered the bank to pay legal costs and an amount for non-financial loss on top of refunding the customer because of the way it handled the complaint. “How banks treat scam victims is important and something we will consider,” Mr Locke said.
“This is not just about the banks, though,” Mr Locke said. “In many cases consumers would never have been scammed were it not for the actions or inactions of telecommunication companies and digital platforms. We will never tackle the scourge of scams and the human misery that scams cause unless all these sectors are required to take robust action to prevent, detect and disrupt scams, and to provide redress to consumers where that is appropriate.”
Another significant concern in 2023-24 was rapidly growing complaints about financial difficulty, including concerns about inadequate responses to hardship applications, the Annual Review noted. Complaints involving financial difficulty rose 18%.
“Complaints relating to home, personal and credit card lending are all rising,” Mr Locke said. “Too many of these complaints relate to poor treatment or ineffective communication during the hardship process. Urgent improvements are needed.”
In general insurance, Mr Locke said AFCA had been engaging with industry to address continued high complaints. “Over the past two years, consumers have faced a record level of premium growth in both car and home insurance. Despite this, we remain disappointed with the lack of action regarding appropriate resourcing, product design, and the adoption of a resolution mindset.”
He welcomed the report of the parliamentary inquiry into insurers’ responses to the 2022 major floods, which includes a call for insurers to resolve more cases efficiently and fairly without consumers having to escalate complaints to AFCA.
You can read the 2023-24 AFCA Annual Review here.
About AFCA – The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent help with financial disputes. AFCA is a one-stop-shop for consumers and small businesses who have a dispute with their financial firm, over things such as banking, credit, insurance, advice, investments or superannuation. Where an agreement cannot be reached between parties, AFCA can issue decisions that are binding on financial firms.
