The Australian Financial Complaints Authority (AFCA) has reported that financial complaints have again exceeded 100,000 in the 2024-25 financial year, marking the second consecutive year at this level.
AFCA’s latest figures show a total of 100,745 complaints received, representing a 4% decrease from the previous year’s record high of 104,861.
Chief ombudsman and CEO David Locke (pictured) noted that while the reduction is a step in the right direction, the overall volume remains significant.
“The movement is in the right direction, but receiving 100,000 complaints in a year is still unacceptably high,” he said.
He added that the industry continues to face high complaint volumes for the third year running and called on firms to resolve issues earlier in the process to avoid escalation to AFCA.
“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 said.
The data revealed that complaints related to general insurance and investments and advice have increased, offsetting reductions in other areas.
General insurance complaints rose by 17% to 34,231, and investment and advice complaints increased by 18% to 4,193.
By contrast, banking and finance complaints dropped by 9% to 54,581, superannuation complaints fell by 16% to 6,164, and life insurance complaints saw a 5% increase to 1,518.
Locke highlighted a 45% drop in scam-related complaints, which contributed to the overall decrease in banking and finance disputes.
However, he cautioned that AFCA only handles a portion of scam-related issues and noted that certain scam types saw an uptick towards the end of the year.
“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 said.
Locke called for the introduction of mandatory industry codes and further measures to address scams, stating that the current regulatory framework is not sufficient.
“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,” he said. “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.”
Personal transaction accounts, motor vehicle insurance, and credit cards were the most frequently complained about products in 2024-25.
The leading issues cited were misleading product or service information, delays in insurance claim handling, and concerns about service quality.
The increase in investment and advice complaints was partly attributed to failures involving several entities, including United Global Capital, Shield Master Fund, First Guardian Master Fund, and Brite Advisors PL.
Complaints related to self-managed super funds (SMSFs) surged by 95% to 1,323, accounting for roughly one-third of all investment and advice complaints.
Allegations of failure to act in the client’s best interest rose by 124% to 1,266.
Locke said the figures indicate ongoing challenges with conflicted advice models and SMSF use, underscoring the need for a Compensation Scheme of Last Resort for those affected by unlawful advice.
“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,” he said. “This only highlights the need for the Compensation Scheme of Last Resort for victims of unlawful advice.”
The rise in general insurance complaints was largely due to add-on insurance products.
Despite this, Locke acknowledged some progress in reducing overall complaint numbers within the sector.
Comprehensive vehicle insurance remained the most complained about insurance product, with delays in claims processing attributed to shortages in parts and skilled labour.
Locke advised insurers to communicate transparently with customers about these industry-wide challenges to help manage expectations during claims.
“To maintain trust, insurers must effectively communicate these challenges transparently and proactively, helping customers navigate the wait with clarity and confidence,” he said.
AFCA’s data showed a 39% reduction in complaints about delays in superannuation claim handling for the year.
Locke described this as a positive development but urged superannuation funds to continue improving service standards, as service quality remains a primary concern.
“The reduction in superannuation complaints is a positive sign that improvements are being made, but we’re still concerned that the top three issues relate to service quality, and we urge superannuation funds to improve service standards,” he said.
Since its inception, AFCA has received around 570,000 complaints and facilitated $1.8 billion in compensation or refunds for consumers. Its work on systemic issues has resulted in over $392 million in remediation for more than 5.4 million people.
Australia’s general insurance sector is progressing with a major revision of the General Insurance Code of Practice, aiming to make the code legally enforceable and more user-friendly for policyholders.
The Insurance Council of Australia (ICA) is overseeing the update, which incorporates recommendations from a recent independent review and the 2022 Parliamentary Flood Inquiry.
