Disputes with financial services firms are rising in Australia, as the country’s ombudsman received 102,790 complaints in 2023, a yearly increase of 23 percent, according to a report by The Sydney Morning Herald. The compensation and refund secured by Australians last year also increased 38 percent to AU$304 million.

AFCA Gets Massive Number of Complaints

Although the Australian Financial Complaints Authority (AFCA) has yet to publish the official numbers, the report outlined that unauthorized transactions, delays in claim handling, and service quality were the top three areas of complaints. It did not mention the derivatives and foreign exchange dealers.

The AFCA is the last resort for Australian residents for dispute resolution with financial services companies. The companies are first raised with the companies offering the financial services.

“We believe many financial firms could be doing a better job of handling complaints within their own internal complaints processes, so only the most complex cases reach AFCA – which is the role we are meant to play,” David Locke, the CEO of the AFCA, told the local publication.

The Financial Ombudsman

The AFCA began operation in November 2018 and has received more than 420,000 complaints. The agency successfully secured AU$1.3 billion in compensations and refunds for distressed customers.

In the last financial year, the ombudsman received 92,915 complaints. According to the official data, a total of 197 complaints were against derivatives dealers operating in the country, representing a significant drop from the 418 complaints in the previous fiscal period. Similarly, complaints against forex dealers decreased to 93 from 622. However, the sharp decline can be justified, as 543 complaints were filed against Union Standard International Group in FY22, a company that has since entered liquidation.

The AFCA's CEO further highlighted that the complaints against financial scams doubled in 2023, which, according to him, is a matter “of great concern.” The ombudsman received about 9,000 complaints of scams. Last year, the AFCA signed a new Memorandum of Understanding with the Austrian Financial Complaints Authority for continued cooperation to fight rising scams.

“As we head into the new year, our hope for 2024 is that this will be the year that anti-scam initiatives by industry and government finally disrupt this serious and organized crime,” Locke added.