Australians in dispute with super funds, banks, insurance companies, and finance companies have filed more than 80,000 complaints in the last 12 months. The Australian Financial Complaints Authority (AFCA) secures $258.6 million in consumer compensation and refunds in FY19/20.
02 July, 2020, | AtoZ Markets – AFCA is a non-government watchdog that provides free, fair and independent assistance in financial disputes. Financial companies that offer financial services to individual customers, credit licensees and superannuation trustees are required to be members of AFCA.
Australians Filed 80,546 Complaints in the Last 12 Months
AFCA today released data on its operations from 1 July 2019 to 30 June 2020. In FY 2019/20, consumers filed 80,546 complaints against financial services companies, with overwhelmingly 43% of credit products, followed by non-life insurance at 24%. In FY 18/19, it was 23,681 complaints.
The number of complaints surged to 13.7% from the last year. Most of the complaints were about credits, insurance claims, and superannuation. Chief Executive Officer and Chief Ombudsman David Locke said:
“One in ten complaints also related to financial difficulty where a consumer was unable to make repayments on loans due to unforeseen circumstances or over-commitment.”
AFCA Receives Nearly 5,000 COVID-19 Related Financial Complaints
During FY 2019/20, AFCA secured AUD 258.6 million ($179.12 million) in consumers compensation and refunds. Last year, AFCA got $185 million in compensation. The watchdog resolved 78% of cases and most resolved within 60 days. 73% of the complaints were resolved in the agreement or favour of the plaintiffs. But banks were the most complaints to financial institutions.
Travel insurance is the highest dispute related to coronavirus. It accounted for more than 82% of allegations to the general insurance industry since the pandemic in March. AFCA has received 4,773 complaints involving COVID-19 pandemic. Most of these complaints relate to general insurance (1,813), in which more than 1,500 are complaints about travel insurance.
Australian consumers have faced many significant challenges this year,” David Locke said. “The pandemic has had a particular impact on Australian households, with 20% of COVID-19 related complaints being about financial hardship.”
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