Australian Financial Complaints Authority CEO and Chief Ombudsman David Locke says complaints are rising at an “unsustainable rate”, with insurance among the most common areas of dispute. 

He says the body received 102,790 complaints last calendar year, a 22% increase on 2022, which resulted in $304 million in compensation, up more than 37%. 

Home building insurance was the fourth most complained about product, despite an 8% drop from 2022 numbers to 8073 complaints recorded. 

Issues related to delays in claim handling, payout amounts and claim denials all recorded notable increases, with the latter up 50%. Delays in claim handling were the second most common issue.  

Mr Locke says a downward trend is needed and has called on financial companies to address complaints “quickly and efficiently in-house”. 

“We believe many financial firms could be doing a better job of handling complaints within their own internal complaints processes, so only the most complex cases reach [the authority] – which is the role we are meant to play,” he said. “Instead, the volume of complaints reaching us is putting unnecessary pressure on the external dispute resolution system and inevitably causing further delays for consumers.” 

Reflecting on the authority’s first five years, Mr Locke says companies have agreed to pay more than $1.2 billion due to successful complaints since its establishment in 2017. 

He says the insurance industry has shown positive signs in acknowledging it “could have done better” with claim delays after the 2022 flood disaster, but says more work is needed. 

“With climate change making such events more likely, it’s important that insurers can promptly help people whose lives have been devastated,” Mr Locke said. 

He says it is time to “recommit to appropriate regulation and meaningful codes of practice, supported by effective dispute resolution, for the benefit of both business and consumers”. 

Click here to read Mr Locke’s full article on the watchdog’s fifth anniversary.