Issues with Investment Product Terms in Australia Jumped by 554%

The Australian Financial Complaints Authority (AFCA) has received 72,358 complaints in the past 12 months, between July 2021 and June 2022, regarding the disputes of Australians with banks, insurers, super funds, investment firms and financial advisers.

Announced on Wednesday, there was a 3 percent increase in the total number of complaints lodged with the AFCA this year when compared with the previous year.

The agency received a total of 2,078 complaints regarding investment and advice-related services. The interpretation of product terms and conditions was the area where the complaints jumped to 654 from only 100 in the previous year, a jump of 554 percent. Other issues were regarding service quality and failure to follow the agreement.

Further, complaints around inappropriate advice dropped 54 percent to 241.

The top four banks together accounted for nearly 20,000 complaints, which is a jump of 10 percent, whereas complaints against the top four insurers jumped 19 percent to about 9,400.

The sharp rise of complaints against the insurers was due to an earthquake in Victoria and then catastrophic storms and flooding across southern states in several regions. Disaster-related complaints in the period more than doubled to 1,586.

However, the overall number of complaints against licensed financial firms dropped 5 percent when compared with the figures of the previous 12 months.

Complaints against credit card issuers were rampant, covering 13 percent of the total companies. Personal transactions are another area where Aussies lodged 7,416 complaints, compared to the previous year’s 5,758 complaints.

Resolving the Grievances

Moreover, the Aussie authority pointed out that the successful complaints logged with it secured more than AU$200 million in compensation and refunds. Additionally, investigations against some of the systemic issues resulted in the return of over AU$18 million to customers.

However, the AFCA has paused 1,413 complaints that it received against 14 insolvent firms, including two forex brokers. It estimated the total customer claims against these insolvent firms to be around AU$195 million.