In tough times Australians turn to AFCA to handle financial complaints

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Consumers have taken more than 400,000 disputes to the Australian Financial Complaints Authority (AFCA) over the past five years, securing a total of $1.2 billion in compensation and refunds.

AFCA says this was during some of the most trying times financial firms and their customers have faced, including a global pandemic, rising interest rates, a sharp escalation in scams activity and the financial impact of significant natural disasters.

AFCA started in 2018 and is a not-for-profit organisation funded by fees and charges paid by member firms. Its service is free for consumers and small business complainants. It has worked with more than 16,500 victims of scams, more than 7,500 people affected by natural disasters (excluding COVID), and more than 30,000 people experiencing financial difficulty.

In addition, AFCA’s systemic issues work – where it identifies wider issues than a single complaint – resulted in 4.9 million people receiving more than $340 million.

"We have dealt with hundreds of thousands of cases over the past five years, but we are fully aware that behind every complaint is an individual, a family or small business,” AFCA’s chief executive officer and chief ombudsman, David Locke, said. “We know how stressful a financial dispute can be, and how critical it is to help consumers and firms resolve their differences.

“An ombudsman service also plays an important role in supporting public confidence in engaging with the financial services sector, because we are here to help when consumers and firms can’t resolve disputes on their own. We work to contribute to a fair and efficient financial services sector.”

With complaints reaching a record 97,000 in the last financial year alone, AFCA’s services had never been needed more, Locke added. “But our hope is that, working with firms, we will see a significant improvement in their in-house complaints handling. Consumers shouldn’t have to be escalating this volume of disputes to AFCA.”

If you're experiencing a financial issue, where to first?

Moneysmart suggests that the first step is to always contact the business in question to explain the problem and how you'd like it fixed. In many cases a simple phone call, email or visit is all that is needed.

Then, if the problem isn't fixed with a simple call or visit, make a formal complaint to the business in writing. Be sure to mark your letter as a 'complaint'.

If your issue still doesn't get resolved, you can complain to an independent body, says Moneysmart.

Financial services, energy, water and telecommunications businesses all belong to independent bodies known as External Dispute Resolution (EDR) schemes. You can contact one of these if the business didn't respond to your complaint within a reasonable time, you're not happy with how it dealt with your issue, or you're not satisfied with the offer it made.

In the finance space, AFCA is the dispute authority or EDR to contact.

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