The financial dispute resolution scheme saw 102,790 complaints escalated to its remit last year – 23% more than 2022.
Such a rate of growth is “unsustainable”, according to chief ombudsman and CEO of the AFCA David Locke.
“The volume of complaints reaching us is putting unnecessary pressure on the external dispute resolution system and inevitably causing further delays for consumers,” he said.
The number of complaints related to scams nearly doubled year-on-year, reaching approximately 9,000.
Meanwhile, Aussie’s strapped for cash also turned to the scheme, with 5,400 complaints made involving financial hardship – a 29% increase.
The amount of compensation complaint-makers walked away with also soared in 2023, climbing 38% year-on-year.
“As we head into the new year our hope for 2024 is that this will be the year that anti-scam initiatives by industry and government finally disrupt this serious and organised crime,” Mr Locke said.
“We also need to see a downward trend in complaints overall, with financial firms working better to support their customers and to address complaints quickly and efficiently in-house.”
The scheme exists to help customers and small businesses reach agreements with financial firms such as banks, lenders, and insurers when the parties can't settle complaints themselves.
When it came to financial products, consumers had the most to say about personal transaction accounts.
More than 16,000 complaints were made about transaction accounts in 2023, up 64% on 2022.
This follows a report from the competition regulator, the ACCC, that found more than seven-in-10 bonus savings accounts did not achieve bonus interest in the first half of 2023.
Credit cards and home loan products also angered punters, as did car and home insurance products.
Other products facing increasing public wrath included investment and advice products, as well as superannuation products.
“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 AFCA – which is the role we are meant to play,” Mr Locke said.
There were also notable increases in the number of complaints regarding unauthorised transactions (up 48%), delays to claims handling (up 20%), claim amounts (up 24%), and denials of claims (up 50%).
Australians lost $455 million to scammers in 2023, according to data from the Australian Competition and Consumer Commission’s (ACCC) Scamwatch.
The majority of that money was lost to investment scams while phishing scams (fraudulent emails, calls, or texts) were the most commonly reported.
Hardship locked in for 2024?
The jump in consumer complaints regarding hardship escalated to the AFCA follows a rate hiking spree that began in mid-2022.
The Reserve Bank of Australia (RBA) lifted the nation's cash rate to a 12-year high of 4.35% late last year.
The cash rate influences the interest rates that lenders charge to borrowers.
Of 1,000 home loan holders surveyed by InfoChoice prior to the RBA’s November hike, half were already handing more than 30% of their income over in mortgage repayments.
Additionally, one in 10 were behind on home loan repayments and nearly 16% were overdue on their bills.
Meanwhile, the median cost of renting in Australia rose more than 11% over the course of 2023, PropTrack data released today revealed.
It looks like there could be cost-of-living relief on the horizon, however.
Many economists are forecasting 2024 could bring the first rate cut, as inflation is predicted to fall and unemployment likely to rise.
Though, all eyes will likely be on the upcoming quarterly inflation read, to be published later this month.
If inflation surprises on the upside, it could herald a February hike.
Image by Amel Majanovic on Unsplash.
Ready, Set, Buy!
Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!
With bonus Q&A sheet and Crossword!
Denise Raward
Harry O'Sullivan
Jacob Cocciolone
Brooke Cooper
