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Bad numbers: What’s behind the record complaints against financial firms?

Are you unhappy with your bank? Still disputing a transaction on your account that you didn’t make? Or have your dealings with the buy now, pay later (BNPL) sector left you more than a little hot under the collar?

You’re not alone. The Australian Financial Complaints Authority (AFCA) reported a 34 percent jump in complaints from the previous financial year.

AFCA chief ombudsman and chief executive officer David Locke said he was deeply concerned by the volume of complaints consumers had to escalate. “It is not fair on consumers and not good for business. We need to see a significant improvement from firms.”

So what’s behind this rise, and what can you do if you’re not getting a satisfactory response from your financial institution?

How many complaints have been lodged with AFCA?

Almost 100,000 complaints were lodged with AFCA for the 12 months to 30 June 2023, with personal transaction accounts overtaking credit cards as the most complained about product, while complaints about BNPL products rose a staggering 57 percent.


A woman filing a credit card complaint


Breaking down the complaints by product

    • Personal transaction accounts - These topped the list with 13,781 complaints, an 86 percent increase from last year’s 7,416
    • Home building - Registered 9,592 complaints, up by 57 percent from 6,120 last year
    • Vehicle insurance (comprehensive) - Complaints went up by 43 percent to 8,296, from 5,791 last year
    • Credit cards - 10,555 people had issues, an increase of 15 percent from last year’s 9,153
    • Home loans - Complaints went up slightly to 7,096, which is 10 percent more than last year’s 6,439

Main issues people had

    • Delayed claims - Claim handling emerged as the top concern, with 10,996 complaints, a significant 76 percent rise from 6,259 last year
    • Unauthorised transactions - Following closely with 10,840 complaints, there was a 69 percent increase from 6,398 in the financial year 2022
    • Insurance claim denials - Denial of insurance claims due to exclusion/condition registered 4,851 complaints, a rise of 51 percent from last year’s 3,222
    • Insurance claim amounts - 6,266 complaints, which is 42 percent more than last year's 4,419
    • Service quality - A little bit of good news; complaints here dropped by 4 percent to 8,374 from 8,744 last year

Complaints grouped by industry

    • Banking and finance - This area got the most complaints at 53,638, up by 27 percent from 42,392 last year
    • General insurance - 27,924 complaints, a big jump of 50 percent from 18,563 last year
    • Investments and advice - 4,840 complaints, up by 51 percent from 3,207 last year (excluding specific firms)
    • Superannuation - 6,957 complaints, up by 32 percent from 5,286 last year
    • Life Insurance - Good news here, complaints dropped by 24 percent to 1,898 from 2,482 last year

Based on these numbers, the following complaints are particularly worth noting.

Personal transaction account complaints

These complaints have surged, overtaking credit card issues for the first time. The primary reason is the rise in scams, particularly those involving unauthorised transactions. As more people engage in online transactions and digital banking, the opportunities for cybercriminals to exploit vulnerabilities have increased. Scammers have also become better at executing unauthorised transactions, leading to many complaints. It's also worth noting that credit cards come with more established fraud protection, leaving those who rely on alternative payment or banking methods more susceptible to such risks.

Delay in insurance claim handling

Insurance claim delays are often expected in the aftermath of large-scale, catastrophic events. However, a significant number of these complaints concern regular, everyday claims.

This pattern points to one of two issues, if not both: inherent inefficiencies within the processes and procedures of insurance companies or perhaps a more deliberate reluctance on their part to settle claims in a timely manner.

Buy now, pay later (BNPL) complaints

As this payment method becomes more popular, especially during financially challenging times, more consumers are using it for essential purchases. But, the nature of BNPL, which can sometimes mask the real cost of items, has a tendency to lead consumers into unexpected debt. This has resulted in an increase in disputes.

What is causing the rise in financial complaints?

The increasing trend of financial complaints can be traced back to a few key catalysts. For many, the purse strings are undeniably tighter. The cost of living is increasing, making daily expenses more challenging to manage. Simultaneously, borrowing money, an avenue often used to bridge financial gaps, is becoming a pricier affair. And then there's the housing squeeze — a looming cloud over renters and homeowners alike.


A stressed couple suffering financial hardship


With the weight of these financial burdens, there's been a marked increase in people's interactions with financial institutions. As they search for remedies to their fiscal woes, the sheer volume of these engagements naturally amplifies the chance for disputes and miscommunications.

What does AFCA do?

A resolution pathway

1. Mediation First

AFCA's primary role in bridging the gap between aggrieved consumers and financial establishments. If you lodge a complaint, AFCA first turns to informal redress mechanisms. They'll champion negotiations, working to achieve a mutually beneficial resolution. Failing that, they lean into conciliation, where a phone conference allows both parties to present their perspectives, aiming for clarity and greater understanding.

2. Preliminary Assessment

Should these initial steps falter, AFCA then provides a preliminary assessment, either verbally or documented. This assessment outlines the core facts, highlights the issues raised, and presents AFCA's initial recommendations for a resolution. Following this, you and the financial firm are given a timeframe to respond: seven days for fast-track complaints and 30 days for other complaints.

3. Final Determination

If both parties don’t agree, AFCA steps in with a final determination. This binding decision is based on fairness, legal principles, industry practices, and previous similar cases.

During the process, AFCA can decide not to continue with your complaint if they believe there's no loss, you've already received appropriate compensation, or the financial firm didn't make an error. You also have the right to withdraw your complaint at any stage.

The duration of this process can vary. Some complaints might be resolved in a matter of weeks, while others, especially complex ones, can take several months.

A watchdog

Apart from direct conflict resolution, AFCA dons the hat of an industry watchdog. It analyses the complaints it receives, identifying industry trends, patterns, and areas of concern. This data approach allows AFCA to provide feedback to financial firms, urging them to address systemic issues and improve their services.

In a bid for transparency, AFCA also publishes data snapshots and annual reports to ensure both the industry and the public are informed about prevalent issues and challenges.

Is it worth complaining about financial institutions?

Yes, it is often worth raising a complaint against a financial institution, especially when you have concrete evidence or documentation supporting your complaint, such as bank statements, communication records, contracts, or other relevant documentation. These strengthen your position.

Also, reports indicate that a significant proportion of complaints, approximately seven out of 10, are resolved in favour of the complainant. This suggests that financial institutions are often willing to address and rectify valid concerns.

Additionally, if you've suffered financially due to a bank or financial entity's oversight or action, you could qualify for compensation. It isn't just about righting a wrong; it's about possible monetary reparation for your troubles.

Benefits of lodging a complaint

    • Holding institutions accountable - Complaints are instrumental in maintaining transparency, ensuring ethical operations, and adherence to set regulations within institutions.
    • Improving industry standards - When you lodge a complaint, you're not just solving your problem; you're spotlighting wider industry issues that, when addressed, could better the experience for all consumers.
    • Personal empowerment - The act of voicing your concerns is in itself empowering. Taking proactive steps by complaining ensures that your grievances get the attention they deserve.

Have a financial complaint?

If you have a grievance with a financial institution, reach out to us. We specialise in channelling complaints directly to the involved parties, streamlining the process for you. Our expertise lies in the art of complaining, so we ensure your concerns don't fall on deaf ears.


A happy young woman who got her financial complaint resolved with the help of Handle My Complaint


If your complaint has not been resolved to your satisfaction with the company directly, we will escalate it by lodging it with AFCA on your behalf. You won't be burdened with repetitive requests for the same information. We will seamlessly transfer all details you've shared with us to AFCA for an efficient resolution process.

If the amount of money you’re disputing is insignificant, it can sometimes feel like a waste of time and too much hassle to lodge an official complaint. But you are entitled to get satisfactory answers from your financial institution. Stand your ground and lodge a complaint with us, and let us navigate the complexities for you. With a track record of successfully handling over 2000 complaints in the past year, we're your trusted ally in the world of financial complaints.