Almost 2000 complaints a week are made against Australian financial institutions. Photo: nateemee.
Complaints against Australian financial institutions have surpassed the 100,000 mark for the second consecutive year, sparking concern from the regulator.
There were 100,745 complaints in 2024-25, down from a record 104,861 complaints in 2023-24 against banks, investment advisers, insurance companies and superannuation firms. However, the total numbers are still very concerning, according to the Australian Financial Complaints Authority (AFCA), a non-governmental ombudsman service that provides free and independent help with financial disputes.
AFCA describes itself as a “one-stop shop” for consumers and small businesses who have a dispute with their financial firm over issues such as banking, credit, insurance, advice, investments, or superannuation.
AFCA’s Chief Ombudsman and CEO, David Locke, said the authority was still receiving far too many complaints.
“The movement is in the right direction, but receiving 100,000 complaints in a year is still unacceptably high,” Mr Locke said.
“We’ve now had three years of high complaints. 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.”
AFCA’s preliminary data snapshot as at 30 June showed banking and finance had 54,581 complaints (down 9%); general insurance 34,231 complaints (up 17%); superannuation 6164 complaints (down 16%); investments and advice 4193 complaints (up 18%); and life insurance 1518 complaints (up 5%).
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 a 95 per cent rise in complaints involving self-managed super funds to 1323 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 1266.
There was a decrease in scam-related complaints, down 45 per cent to 5977, 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 is far too high, and behind every case is a consumer who has been traumatised and often suffered life-changing impacts.”
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.
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,” Mr Locke said.
“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,” he said.
Since starting operations, AFCA has received about 570,000 complaints, helping to secure $1.8 billion in compensation or refunds for consumers. It was established in November 2018, replacing the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal. Where an agreement cannot be reached between the institution and the customer, AFCA can issue binding decisions on financial firms.
