Forty-one per cent of COVID-19 complaints lodged with the complaints authority related to credit, with the majority of issues relating to borrowers not being able to access assistance.
According to new data released by the Australian Financial Complaints Authority (AFCA), the COVID-19 pandemic generated 15 per cent of financial complaints in the year since March 2020.
The statistics show that 11,482 of the 77,739 complaints received in the period 3 March 2020 to 28 February 2021 were related to COVID-19.
The non-government ombudsman service noted that, of the COVID-19 complaints received, 41 per cent related to credit products.
Indeed, 1,590 complaints related to credit cards, 1,204 related to mortgages, 800 related to personal loans and 371 related to business loans.
Notably, however, statistics for the second half of 2020 show that the monthly average for complaints in relation to financial difficulty fell about 35 per cent, and complaints involving the major banks were also down. (Statistics relating to complaints about brokers over the period were not available at the time of writing.)
The second most common COVID-19 complaint lodged to AFCA related to general and travel insurance (however, home contents and car insurance complaints fell as people stayed at home).
Indeed, among COVID-associated complaints, travel insurance was the most complained about product type, with 3,516 complaints.
Scam-related complaints (those related to unauthorised transactions and financial scams) also jumped 23 per cent in the monthly average for complaints in the second half of 2020. Some of the complaints involved scammed amounts topping $1 million, the body noted.
Overall, the AFCA stats reveal that the top four reasons for people raising financial disputes were related to customers not being able to access assistance.
The bulk of COVID-related complaints (65 per cent) came through in March-August 2020, which AFCA suggested could have been due to financial firms and consumers still coming to grips with the virus’s impacts. It then trended downwards as companies “fine-tuned their responses, activities like travel reduced and the economy steadied”.
Speaking of the figures, AFCA’s chief operating officer, Justin Untersteiner, said the body received fewer complaints than anticipated.
Mr Untersteiner elaborated: “While not seeking to downplay the challenges people have faced, and continue to face, this was fewer complaints than we thought might arise from the pandemic.
“Banks were quick to respond, providing emergency support as they handled unprecedented numbers of requests for repayment deferrals. Superannuation funds worked with us to resolve consumer concerns about early access to super funds. Government financial support measures also played a vital role.”
However, he added that the next few months were important as government support measures, such as the JobKeeper wage subsidy, are wound back.
“The most difficult time for some people may well be ahead as measures like JobKeeper come to an end,” he said.
“It’s really important that financial firms continue to listen to and communicate with their customers in the next 12 months.”
AFCA said it had been able to resolve nearly 90 per cent of the COVID-related complaints it received – in the vast majority of cases by helping individual complainants and financial firms reach agreement.
Overall, in 2020 AFCA said it resolved disputes resulting in compensation and refunds totalling $294 million, while other outcomes included firms waiving fees, forgiving debt and making changes to financial product design.
AFCA also undertook investigations into a range of systemic issues in 2020, it said, resulting in remediation payments to consumers and small businesses totalling $187.3 million.
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