ISCOVER
The financial complaints body has received more than 100,000 complaints for the second consecutive financial year.
The Australian Financial Complaints Authority (AFCA) has noted that while the volume of complaints about the finance industry has fallen, it bemoaned the “unacceptably high” level of financial complaints for the financial year ending June 2025 (FY25), after it exceeded 100,000 for the second year in a row.
There was a total of 100,745 complaints in the year, a 4 per cent decline from a record 104,861 the previous year.
AFCA said that the industry had “overall made progress on reducing high complaint numbers”, but suggested that the volume was still too high.
The three most complained-about financial products overall in FY25 were personal transaction accounts, motor vehicle insurance, and credit cards.
The top three issues were misleading product or service information, delay in insurance claim handling, and service quality.
AFCA’s preliminary data as of 30 June showed that complaints about banking and finance products fell in the last financial year.
There were 54,581 banking and finance complaints in FY25, down 9 per cent.
But complaints in investments and advice, and general insurance, outweighed falls elsewhere.
Complaints linked to investments and advice rose 18 per cent to 4,193, while life insurance complaints were up 5 per cent at 1,518.
Investment and advice complaints rose 18 per cent amid a string of failures, including United Global Capital, Shield Master Fund, First Guardian Master Fund, and Brite Advisors PL.
There was a 95 per cent rise in complaints involving self-managed super funds (SMSF) to 1,323, accounting for a third of complaints in investments and advice.
Notably, SMSF complaints that were about failure to act in the client’s best interests surged 124 per cent to 1,266.
There were 34,231 general insurance complaints (up 17 per cent) and 6,164 superannuation complaints (down 16 per cent).
AFCA Chief Ombudsman and CEO David Locke said that while the FY25 figure was lower than last year, the body was still receiving far too many complaints.
“The movement is in the right direction, but receiving 100,000 complaints in a year is still unacceptably high,” Locke said.
“We’ve now had three years of high complaints. Firms have more work to do to ensure fair responses to complaints are delivered earlier, without people having to take the extra step of coming to us.”
Locke welcomed a decrease in scam-related complaints, down 45 per cent to 5,977, contributing to the overall fall in banking and finance complaints.
“While any decline is positive and we welcome the progress made by Government and industry to prevent scams, caution should be exercised in interpreting AFCA’s scam numbers,” Locke cautioned.
“AFCA currently only sees a small proportion of scam complaints, and towards the end of the financial year we saw an uptick in some scam types that cause great harm. The number of scam cases are far too high and behind every case is a consumer who has been traumatised and often suffered life changing impacts.”
Locke warned that more action was needed to address scams.
“We urgently need mandatory industry codes and further action from all to prevent, protect and respond to scams. This evil trade causes so much human harm, and the law and regulatory framework we currently have is not sufficient to address this. Industry should not wait to take action; every day we see the impact of more people affected,” Locke said.
Commenting on SMSF, Locke said: “What we’re seeing in complaints is a clear pattern of conflicted advice models and the inappropriate use of self-managed super funds that ultimately isn’t in the customer’s best interest.
“This only highlights the need for the Compensation Scheme of Last Resort for victims of unlawful advice.”
Since starting operations, AFCA has received about 570,000 complaints and secured more than $1.8 billion in compensation or refunds paid to consumers.
AFCA’s full data will be available in the annual review later this year.
[Related: AFCA moves to expand oversight to bank scams]
JOIN THE DISCUSSION