AFCA complaints soar, but insurance bucks the trend
Complaints to the newly-launched Australian Financial Complaints Authority (AFCA) soared by 47% last month, but general insurance improved with a drop of 5%.
AFCA opened its doors at the start of November, taking over from the Financial Ombudsman Service (FOS), Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.
“The number of complaints made to AFCA in November against general insurers has decreased slightly, by 5%, when compared to complaints made to FOS in October,” a spokesman told insuranceNEWS.com.au.
“This is consistent with the decrease in the overall numbers of complaints received by AFCA about general insurance products and follows the trend FOS saw in general insurance over the last six months of operation.”
AFCA received more than 13,000 phone inquiries across the sectors it covers during November as well as 6522 complaints from consumers and small businesses.
It says it is averaging about 310 complaints per business day and has so far experienced an increase of more than 47% in complaints received when compared to the schemes it replaced.
The authority opened its doors as the Hayne royal commission was focusing on the need for financial services firms to raise standards and restore trust. AFCA promoted its role with an advertising campaign to coincide with its November 1 launch.
“This number of calls and complaints is on par with what we were expecting,” CEO and Chief Ombudsman David Locke said.
“We want to make sure that members of the public know where to go for help when they have a financial complaint they can’t resolve directly with their financial firm.”
General insurance remained the second-most complained about area, representing 21% of complaints, while credit issues represent 45% of the total.
By provider type, banks sparked 2367 complaints, followed by general insurers with 1159 and credit providers with 1040.
Denial of claims due to exclusions or conditions was the major source of general insurance complaints, followed by disputes over claim amounts and handling delays.
Mr Locke says streamlined processes and systems performed well in the first month – 80% of complaints were lodged online and 15% of those received last month had been finalised.
“AFCA provides quick and easy access to fair resolutions. This is part of our role in rebuilding trust in the financial services sector,” he said.
Fewer than than 6% of licensee members had a complaint lodged against them in November.