The Chief Ombudsman of the Australian Financial Complaints Authority (AFCA) has expressed concern over the increasing number of complaints against financial institutions. This sharp rise in complaints during the 2022-2023 financial year is linked to the increasing cost of living and interest rate hikes which have caused financial strain for many Australians.
According to data from the AFCA, consumers and small businesses escalated 102,790 complaints to the organisation during the period, representing a 23 percent increase compared to the previous year. The data also revealed a 95 percent surge in scam reports and a 29 percent increase in complaints about financial hardship.
David Locke, the AFCA’s chief ombudsman, emphasized that the volume of complaints reaching the AFCA is growing at an unsustainable rate. The organization is particularly concerned about the doubling of scam-related complaints and the impact of increased interest rates and cost of living pressures on complaints involving financial hardship.
Of the complaints received, the most significant increases were found in the denial of claims, unauthorized transactions, and delays in claim handling. Personal transaction accounts, credit cards, and insurance products were among the top sources of dissatisfaction for Australian consumers and small businesses. Despite managing to recover over $304 million in compensation and refunds, the AFCA stressed the need for financial firms to improve customer satisfaction and dispute resolution to reduce the pressure on the external dispute resolution system.
The AFCA’s data is consistent with a report by the National Australia Bank, which revealed that 44 percent of Australians experienced some form of financial hardship in the third quarter of 2023. This figure had increased from previous months and a year ago, particularly affecting younger Australians and those in higher income groups. The household savings rate also dropped to the lowest level since mid‑2008 in the June quarter of 2023.