ASIC finds aggregators under-reporting complaints against brokers

Its findings exposed weaknesses in complaint identification, regulatory reporting and resolution.

Licensees supplied details of more than 400 complaints concerning alleged failures to act in consumers’ best interests between March 2023 and May 2025.

The review found that BID complaints represented around 7.5 per cent of the total internal dispute resolution (IDR) complaints reported to ASIC in its analysis.

However, the regulator’s findings cast doubt on the completeness of the recorded picture.

Complaints missing from the reporting chain

ASIC said that IDR complaints about mortgage brokers were being under-reported by both credit representatives to licensees and by licensees to ASIC.

“We observed several indicators of underreporting,” ASIC said.

The regulator added that a central weakness was the absence of systematic checks for complaints that had escaped reporting, including those settled quickly.

“None of the licensees had conducted any assurance process in the two years before our review to identify complaints that may have been missed,” the report said.

“During our review, two licensees surveyed their credit representatives, with one identifying a range of unreported complaints that were resolved within five business days. While this was a modest improvement, a voluntary survey of representatives does not have the same rigour and reliability as a dedicated assurance process.”

ASIC also found that complaints could remain outside licensees’ oversight well after borrowers first raised them.

“Across the records provided by licensees, we saw multiple examples of complaints by consumers to credit representatives that were not reported to the licensee in a timely manner,” ASIC said

“In some cases, weeks or months passed before licensees were notified of the complaint.”

The reporting deficiencies extended to information supplied to ASIC, with one licensee subsequently correcting its submissions.

“Some licensees provided incomplete IDR data to ASIC. One licensee found that it had previously failed to report two categories of IDR referrals, complaints that were referred to it by AFCA for internal resolution and complaints that were escalated to AFCA after the IDR process had finished,” the report said.

“This resulted in the number of complaints the licensee reported to ASIC being understated. The licensee has resubmitted its IDR data to ASIC.”

Referrals from the Australian Financial Complaints Authority (AFCA) also presented opportunities to investigate whether earlier complaints had gone unrecorded.

“Licensees were not always proactive in confirming whether complaints referred from AFCA, for which the licensee had no record of an IDR complaint, indicated that a complaint had been made directly to their credit representative, but not reported to the licensee,” ASIC said.

ASIC called for better complaint identification and accurate regulatory reporting and added that promptly resolving a complaint did not remove the requirement to record and report it.

Borrower grievances extend beyond loan selection

The report also revealed consumers’ chief grievances, with complaints by borrowers against brokers covering recommended loans that lenders declined, borrowers not qualifying for a certain product, or brokers lacking accreditation to arrange a loan.

The report further noted that borrowers claimed that they had missed requested rate locks, fixed rates, offset accounts, or interest-only repayments, with some alleging that their application and settlement delays caused financial losses or missed property purchases.

Communication failures included inadequate explanations and repeated chasing for updates, while calculation errors involved settlement funding, loan disbursements and repayments.

Borrowers also disputed cashback eligibility and amounts, unexpected annual or risk fees, and refinancing break costs.

Further complaints concerned scams, fraud, privacy, confidentiality, and credit report inquiries.

ASIC separately found differences in how licensees recognised relevant complaints.

“Not all licensees identified complaints that aligned with the typical complaint themes. For example, two licensees did not identify any complaints that aligned with the theme of miscalculation errors,” ASIC said.

A closer examination also challenged one licensee’s reported absence of best interests duty complaints.

“Two licensees reported they had not identified any best interests duty complaints. However, a review of one of these licensees’ complete complaints register suggested otherwise,” the report said.

Externally escalated broker complaints represented around 5.4 per cent of home loan complaints considered by AFCA, while just under 10 per cent of those broker complaints concerned BID obligations.

Central handling delivers stronger results, ASIC finds

ASIC found that complaints managed centrally by licensees were handled better than those managed by representatives.

The report described four licensees allowing representatives five business days to attempt resolution before referring unresolved complaints, while four required all complaints to be referred.

The review also found that even where referral deadlines existed, representatives did not consistently follow them.

“We also observed multiple examples where representatives failed to notify the licensee about a complaint within the timeframe specified,” ASIC said.

“In some cases, the licensee was only made aware of the complaint following an IDR referral from AFCA. This highlights the importance of licensees providing adequate training and oversight for their credit representatives to ensure they are aware of the IDR processes and their responsibilities in complaints handling.”

The regulator further identified IDR responses omitting mandatory information about complainants’ AFCA escalation rights and practical details needed to pursue that option.

ASIC also noted that resolution shortcomings continued after some complaints had reached an agreement, including a prolonged compensation payment.

“In one case, a licensee took 12 weeks to pay compensation after the complainant accepted the compensation offer,” ASIC said.

Staffing arrangements presented another vulnerability, although ASIC acknowledged generally satisfactory handling among the licensees concerned.

“Four licensees had only one or two designated complaints handling officers. Only two of these licensees had contingencies in place to cover leave or increased workload,” the report said.

“We observed in one licensee’s complaints that support staff were unable to properly handle an IDR complaint when the dedicated complaints officer went on leave.”

[Related: Mortgage industry says cheapest isn’t always best after BID review]