Financial complaints soar as new body opens doors
management
1 minute read

Financial complaints soar as new body opens doors

Financial complaints soar as new body opens doors

by Sasha Karen | December 07, 2018 | 1 minute read

The new body that fields financial complaints has fielded over 13,000 enquiries in its first month, including those relating to investment property loans, it has been revealed.

Sad face complaints
December 07, 2018

After having received 6,522 complaints from consumers and small businesses (averaging out at about 310 complaints per business day), the Australian Financial Complaints Authority (AFCA) has revealed that it has experienced a 47 per cent increase in complaints received, when compared to its three predecessor schemes.

AFCA, which opened on 1 November, has been fielding complaints mainly related to credit issues (45 per cent).

The next most-complained about category was general insurance at 21 per cent, deposit taking at 10 per cent, and superannuation at 8 per cent.

Banks were the most complained about provider type, followed by general insurers and credit providers.

Over the month of November, AFCA received 82 complaints relating to investment property loans, with the top issue relating to responsible lending, a spokesperson for AFCA told Smart Property Investment.

This is an 11 per cent increase in complaints when compared to those fielded by AFCA’s predecessor, the Financial Ombudsman Service.

The complaints are not expected to let up either, with at least 55,000 complaints expected to be made to AFCA over the year.

What issues does AFCA consider?

If an investor has an issue relating to investment property investment loans, AFCA is able to handle it.

“This includes where advice was given that was inappropriate or insufficient, charges or commissions that were incorrectly charged, applied or calculated, or if you were given misleading information about the product,” a spokesperson said.

“AFCA can also consider complaints about irresponsible lending, or if instructions you gave to your provider were not followed or there was a delay.

“If you are experiencing financial difficulty due to making payments on a property investment loan, and you can’t reach an agreement with your financial provider, you can complain to AFCA.”

Issues that AFCA do not consider, however, include the level of a free, premium, charge, rebate or interest rate, with the exception of hidden or misinterpreted fees.

Regardless, AFCA advocates for complaints to be made first to the initial financial provider.

“In many cases we find that issues are resolved early this way,” the spokesperson said.

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