Over 7,000 complaints relating to home loans were lodged with AFCA over the financial year, but only a fraction was against mortgage brokers.
The Australian Financial Complaints Authority (AFCA) has released updated figures on its online comparative tool, AFCA Datacube, which includes information about all financial complaints lodged with it from 1 July 2019 to 30 June 2020.
The data has shown that AFCA received 7,378 complaints at the registration and referral stage relating to home loans during this period (FY2019-20), with only 40 complaints lodged against mortgage brokers.
This comprises just 0.5 per cent of total home loan-related complaints.
Previous figures released by AFCA revealed that it had received only 15 complaints against mortgage brokers relating to home loans between July and December 2019, which comprised 0.7 per cent of total complaints.
Data provided to The Adviser in July by AFCA showed that it received 1,540 complaints against different types of brokers between 1 July 2019 and 30 June 2020.
This included complaints against general insurance brokers, life insurance brokers and stockbrokers, as well as mortgage brokers and finance brokers.
According to the latest figures released by AFCA Datacube, the bulk of complaints about home loans were lodged against lenders, with 6,094 complaints, which comprised 83.0 per cent of total complaints.
A total of 513 complaints were lodged against credit providers (7.0 per cent), while 111 complaints were against non-bank lenders (1.5 per cent), and mutual banks received 52 complaints (0.7 per cent).
Commenting on the release of the figures for FY20 by AFCA Datacube, AFCA CEO and chief ombudsman David Locke commended the banks for responding positively to what he called “unprecedented” numbers of requests for loan repayment deferrals by borrowers whose pockets have taken a beating due to the COVID-19 crisis.
He encouraged borrowers who are facing financial difficulty to seek help immediately rather than wait.
“If you are struggling to make repayments, we urge you to contact your bank to discuss the best long-term solution for your circumstances,” Mr Locke said.
“The banks have committed to being fair and reasonable in dealings with consumers and to tailor solutions to their individual needs. It’s never a good idea to ignore calls and contact from your bank or lender.”
AFCA COVID complaints more than double since May
AFCA has also released data around the number of complaints it has received relating to the COVID-19 crisis between 3 March since the onset of the pandemic to 31 August.
It showed that AFCA has received 7,420 complaints during this period, which has more than doubled from the period between March and May, when it received over 3,180 COVID-19 related financial complaints.
The data showed that most of these complaints related to travel insurance, with the complaints authority receiving 2,610 complaints about the product.
“The early impact of COVID-19 can be seen in the spikes in complaints relating to travel insurance and early access to superannuation in particular,” Mr Locke said.
“With so many travel plans impacted, it was inevitable that there would be a big increase in travel insurance claims as well as disputes regarding ‘chargeback’ requests on credit cards.”
A breakdown of the data by product line revealed that 14 per cent of all complaints related to superannuation, and AFCA received 817 complaints about superannuation accounts.
“With the early access to superannuation, complaints initially related to delays in payments,” Mr Locke said.
“It was challenging for many superannuation funds to process such a high number of requests in a short period of time. AFCA worked proactively with the funds to resolve consumer concerns as they arose and to learn any lessons before the second phase of withdrawal requests commenced in early July 2020.”
“This resulted in far fewer complaints during the second early release application period and it meant consumers were able to get their money sooner.”
By product line, 41 per cent of all complaints related to general insurance, while 35 per cent of all complaints received by AFCA related to credit issues.
There were only 674 complaints relating to home loans, 398 against personal loans and 172 complaints against business loans.
A total of 1,409 COVID-19 complaints involved financial difficulty, while AFCA received 4,270 calls on its dedicated COVID-19 support line.
In July, AFCA reported fewer COVID-19-related complaints than it expected, but Mr Locke had warned that this could rise when the government and lenders wind back support such as the deferral of loan repayments.
“We anticipate seeing more financial difficulty-related COVID-19 complaints over the next six months as government support, such as JobKeeper payments, are wound back, along with the end of financial firm initiatives such as a ban on rental evictions and mortgage pausing,” Mr Locke said.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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