AFCA awards A$185m compensation despite awareness challenge
(29 October 2019 – Australia) Australians lodge up to 200 complaints a day with the new Australian Financial Complaints Authority (AFCA) as the ombudsman awarded A$185 million in compensation in the first 12 months of operation, totalling 73,272 complaints.
The body replaced three former external dispute resolution schemes yet there was a 40 percent increase in complaints received compared to the aggregate total of 52,232 complaints lodged with the original schemes in the 2017/18 financial year.
77 percent of claims were successfully resolved with the majority of those within 60 days or less. Awareness of the organisation seemingly remains limited to those seeking redress in the event of a dispute given only three percent of Australians know who the AFCA is or what support they provide. AFCA also hosted forums for small business, consumer advocates and AFCA members in ten locations with credit complaints, insurance claims and financial hardship the most prevalent issues.
“Every day we continue to hear from people who are dissatisfied with the way their financial firm has handled their complaint. These matters have not been resolved internally by financial firms and so the individual then brings their complaint to AFCA. We take our commitment to fairness and independence very seriously, and where possible we encourage the financial firm and complainant to resolve the matter among themselves. The statistics show that this happened with 70 percent of all claims resolved in the past 12 months" stated AFCA CEO and Chief Ombudsman David Locke.
“Still, the increase in complaint numbers we are witnessing at AFCA indicates that there is still work to be done by firms to improve their practices and restore public faith in financial firms. AFCA will continue to focus on member engagement to help firms to enhance their own internal dispute resolution procedures. Establishing AFCA as a new organisation and handling a 40 percent increase in complaints was never going to be easy and we are still improving the way we operate,” he added.
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