Financial Complaints Soar in Australia, Credit Disputes In Focus

The Australian Financial Ombudsman Service (FOS) has released its statistics for April to June this year. According to the report, the financial authority managed to close its highest number of complaints in the past five years.

The FOS received 11,790 disputes in the stated period. This is an increase of 17% from the same quarter last year. At the same time, the financial dispute resolution organisation also closed 11,611 disputes. This is the highest number of disputes closed in one financial quarter in the past five years

The most commonly received dispute this quarter was over credit, which accounted for 4,741 complaints, or 40% of the total. General insurance disputes came in at a close second, at 3,552 complaints, or 30%.

During the quarter, the ombudsman accepted 6,395 disputes, or 73% of the total received. This is an uptick of 17% from the previous quarter and 14% more than the same period last year.

Of the accepted disputes, credit disputes again led the pack at 2,595, contributing to 40% of the total complaints. General insurance disputes were the second highest yet again, numbering 2,134, or 33% of the total.

FOS closes the highest number of disputes in five years

For the quarter, the ombudsman closed 11,611 disputes, an increase of 11% when compared to the previous quarter and the same quarter in 2017.

For the disputes that were closed, more than two-thirds, or 64%, were resolved through an agreement between the consumer and the financial services provider. This is an increase of 5% from the previous quarter, which had this outcome for 59% of its disputes. The ombudsman also declined 14% of the disputes because they were out of its jurisdiction.

This is the last time that the FOS will be releasing dispute statistics. This is because the FOS is being replaced by the Australian Financial Complaints Authority (AFCA), a new external dispute resolution (EDR) scheme.

From November 1st 2018, the AFCA will deal with all complaints from consumers in the financial system which would typically go to the FOS, the Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT). This is to streamline the dispute resolution process for consumers.