FBAA ‘not surprised’ by low broker complaints

The Australian Financial Complaints Authority (AFCA) annual review that was released earlier this week (23 October), outlined the volume and type of complaints the body had handled over the 2023 financial year.

AFCA had previously announced a record 96,987 complaints were lodged by consumers in FY23, a rise of approximately 34 per cent, while the number filed against brokers was relatively small.

The body found there was a 27 per cent rise in banking and finance complaints, up 53,648, the largest number of grievances for the product since it began operations in 2018–19.

Despite almost 77 per cent of AFCA’s 44,958 members being credit representatives, and over 2,000 being brokers, the AFCA’s Datacube revealed there were only 332 complaints made against the broker channel.

The body found that mortgage brokers – excluding finance brokers – totalled only 0.1 per cent of complaints.

FBAA managing director Peter White said he was unsurprised by the low number of broker complaints with the industry remaining off the Australian Securities and Investments Commission’s (ASIC) radar.

Mr White stated: “FBAA is not surprised that broker complaints are so low based on the information AFCA supplied to the FBAA earlier this year, and that ASIC does not have our sector on a serious watch radar.”

However, he added that the body had recently put forward submissions – not available to the public – regarding AFCA’s ambition to move further into the commercial lending space.

“The FBAA has recently put submissions to AFCA in relation to their considerations to deepen their footprint into the commercial lending space which we strongly oppose, especially when they look like they are wanting to place consumer-based principles against commercial lending considerations,” Mr White commented.

AFCA’s annual report also revealed that the time taken to resolve complaints had risen over the financial year, with the average time to close banking and finance complaints increasing to 57 days in FY23.

The report stated that a total of 19,021 banking and finance complaints were closed within 30 days, up from 16,759 in FY22.

Across FY23, the body reported that it resolved 86,185 complaints and awarded $253.8 million in compensation and refunds to consumers and small businesses.

[Related: Mortgage broker complaints are nominal, AFCA data shows]