AFCA reports on their first six months of operations

NIBA CEO Dallas Booth has welcomed the Australian Financial Complaints Authority (AFCA) report on their first six months of operations.

He said, “AFCA have provided some very useful information on the early stages of the new dispute resolution scheme, and their approach to the resolution of complaints that reach the EDR process.”

“AFCA has advised NIBA that of the nearly 8,000 complaints relating to general insurance, less than 200 related to general insurance brokers. This is a real credit to the insurance brokers of Australia, and is a tremendous indication of the good work that insurance brokers are doing each and every day on behalf of their clients.”

“The NIBA Board of Directors was pleased to have had the opportunity to meet with AFCA Chief Ombudsman David Locke, and General Insurance Ombudsman in May this year to discuss AFCA’s work, and their approach to resolving complaints and disputes in general insurance.  NIBA will continue to work with AFCA to make dispute resolution efficient and fair for all concerned.”

AFCA’s Six Month Report reveals the complaints body has received over 35,000 complaints, far exceeding initial forecasts. The report states that 60 per cent of complaints have already been resolved, with 74 per cent resolving in favour of the complainant or by agreement.

AFCA Chief Ombudsman and CEO David Locke said the large number of complaints highlighted the important role AFCA plays in rebuilding customer trust in the Australian financial services sector.

“AFCA stands firmly on the side of fairness and a key part of our role is increasing transparency in the financial sector,” Locke said.

“We have published this report so that Australians can see which financial products and services receive the most complaints and how they are being handled by the financial firms. We recognise the importance of making this data open and accessible to the public.”

Banks received the most complaints of all financial institutions, followed by general insurers and credit providers. The most complained about financial products were credit cards, followed by home loans and personal loans.

In general insurance AFCA received 7,969 complaints in its first six months, which accounts for 23 per cent of all complaints and a 20 per cent increase on the number of complaints FOS received over the same period last year (6,617). The transition to AFCA for the general insurance industry has been relatively seamless. While AFCA has seen an increase in the complaints received this has been more than matched by the resolution of those matters at the registration and referral stage, with the industry now resolving more than 45 per cent of matters early.

There has been no substantial change in the type of complaints received, with motor vehicle and home insurance matters being the most complained about products. The high number of complaints relate to delays in claims handling (1,476) and service quality (422) indicate that the industry is still not meeting customers’ expectations.