Annual Review: complaints still too high, as households continue to face cost-of-living pressure
David Locke
The complaints data in the Australian Financial Complaints Authority’s (AFCA) Annual Review, published today, demonstrates the persistent financial pressures facing consumers, as well as areas where financial firms can do better when dealing with disputes.
In the 2024–25 financial year, and for the second year in a row, AFCA has received more than 100,000 complaints.
“We know many Australians continue to feel financially stretched and stressed – and behind every complaint we receive is a person seeking fairness and resolution in a time of uncertainty,” said Chief Ombudsman and Chief Executive Officer David Locke.
“In times of economic pressure, it’s critical that financial firms strengthen their internal dispute resolution processes and ensure resources are available to deal with disputes in a fair and timely manner.”
The 2024–25 financial year saw banking and finance complaints continue to be the largest complaint type, making up 54 per cent of all complaints. Despite a 17 per cent drop in financial difficulty complaints overall, “failure to respond to a request for assistance” remained in the top five complaint types for the sector.
“We’re calling on all financial firms to stay committed to early resolution and proactive engagement with their customers, particularly those experiencing financial hardship,” said Mr Locke.
“We know more and more families are experiencing hardship due to cost-of-living pressures, and we urge financial firms to genuinely consider these requests with fairness and compassion.”
Large scale collapses in the financial advice sector continue to result in high volumes of complaints against advisers and financial advice firms – up 18 per cent from last financial year. Self-managed superannuation fund complaints significantly increased by 95 per cent and “failure to act in the client’s best interest” complaints increased a concerning 124 per cent.
“Our complaints data points to systemic issues in advice models, particularly where conflicts of interest and inappropriate use of SMSFs are involved,” Mr Locke said.
“This underscores the importance of the Compensation Scheme of Last Resort to ensure consumers have access to redress when financial advice fails to be in their best interest.”
This year AFCA’s jurisdiction was expanded to include Buy Now Pay Later (BNPL) providers, and in 2024–25, AFCA received 2,099 complaints about these products. The most common issues were credit enquiries, unauthorised transactions, and service quality.
“BNPL products continue to be popular with Australians, especially younger Australians, and we are watching this sector with interest. As providers fulfil their credit license obligations, we expect to see new complaint types emerge, including responsible lending and credit reporting concerns,” said Mr Locke.
AFCA received 34,231 general insurance complaints, a 17 per cent increase from last year, which was driven by complaints about add-on insurance. Excluding add-on insurance, general insurance complaints remained consistent with the last two years.
“Persistently high volumes of complaints about general insurance demonstrates there is more to be done by the sector to prevent complaints reaching AFCA, particularly in cases where escalation could have been avoided if the issue was simply a claim delay,” said Mr Locke.
“Proactive and clear communication with customers can often be the very thing that stops a complaint from being escalated in the first place.”
