The Australian Financial Complaints Authority (AFCA) has received more than 100,000 complaints for the second year in a row.
Despite a 4 per cent decline in complaints overall, chief Ombudsman and chief executive officer David Locke said AFCA was still receiving far too many.
“The movement is in the right direction, but receiving 100,000 complaints in a year is still unacceptably high,” Mr Locke said of the 100,745 complaints in 2024-25. The slight decline was from a record 104,861 complaints the previous year.
“We’ve now had three years of high complaints,” Mr Locke said. “Firms have more work to do to ensure fair responses to complaints are delivered earlier, without people having to take the extra step of coming to us.”
Higher complaints in investments and advice and in general insurance outweighed falls elsewhere. AFCA’s preliminary data snapshot as at June 30 showed:
Banking and finance 54,581 complaints (down 9%)
General insurance 34,231 complaints (up 17%)
Superannuation 6,164 complaints (down 16%)
Investments and advice 4,193 complaints (up 18%)
Life insurance 1,518 complaints (up 5%)
Mr Locke welcomed a decrease in scam-related complaints, down 45 per cent to 5,977, contributing to the overall fall in banking and finance complaints.
“Whilst any decline is positive and we welcome the progress made by Government and industry to prevent scams, caution should be exercised in interpreting AFCA’s scam numbers,” Mr Locke said.
“AFCA currently only sees a small proportion of scam complaints, and towards the end of the financial year we saw an uptick in some scam types that cause great harm. The number of scam cases are far too high and behind every case is a consumer who has been traumatised and often suffered life changing impacts.”
“We urgently need mandatory industry codes and further action from all to prevent, protect and respond to scams. This evil trade causes so much human harm, and the law and regulatory framework we currently have is not sufficient to address this. Industry should not wait to take action; every day we see the impact of more people affected.”
The three most complained about financial products overall in 2024-25 were personal transaction accounts, motor vehicle insurance and credit cards. The top three issues were misleading product or service information, delay in insurance claim handling, and service quality.
Investment and advice complaints rose 18 per cent amid a string of failures, including United Global Capital, Shield Master Fund, First Guardian Master Fund, and Brite Advisors PL.
There was an allied 95 per cent rise in complaints involving self-managed super funds (SMSF) to 1,323 complaints, accounting for a third of complaints in investments and advice. Complaints alleging failure to act in the client’s best interest rose 124 per cent to 1,266.
“What we’re seeing in complaints is a clear pattern of conflicted advice models and the inappropriate use of self-managed super funds that ultimately isn’t in the customer’s best interest,” Mr Locke said. “This only highlights the need for the Compensation Scheme of Last Resort for victims of unlawful advice.”
While general insurance complaints rose 17 per cent to 34,231, Mr Locke noted that a surge of complaints about add-on insurance was the main cause of the increase. Apart from that the industry had overall made progress on reducing high complaint numbers. However comprehensive vehicle insurance was again the most complained about insurance product.
“Delays in motor vehicle insurance claims are increasingly driven by industry-wide shortages in parts and skilled labour. To maintain trust, insurers must effectively communicate these challenges transparently and proactively, helping customers navigate the wait with clarity and confidence.”
Mr Locke welcomed an improvement in claim handling by superannuation funds, with complaints about delays in claim handling falling 39 per cent in 2024-25.
“The reduction in superannuation complaints is a positive sign that improvements are being made, but we’re still concerned that the top three issues relate to service quality and we urge superannuation funds to improve service standards,” said Mr Locke.
