Australian households struggling with cost-of-living pressures continue to clash with financial institutions, as the Australian Financial Complaints Authority (AFCA) reported more than 100,000 disputes in the 2024-25 financial year – the second consecutive year to exceed that mark.
Banking and finance complaints again made up the largest share of all cases at 54%. Although financial difficulty complaints fell by 17%, AFCA noted that “failure to respond to a request for assistance” remained among the top five issues for the sector.
“We’re calling on all financial firms to stay committed to early resolution and proactive engagement with their customers, particularly those experiencing financial hardship. We know more and more families are experiencing hardship due to cost-of-living pressures, and we urge financial firms to genuinely consider these requests with fairness and compassion,” AFCA chief ombudsman David Locke said.
Beyond the banks, the financial advice sector showed signs of deeper structural problems. Complaints against advisers and advice firms rose 18%, fuelled by disputes over self-managed superannuation funds (SMSFs), which surged 95%. Reports of failure to act in the client’s best interest jumped 124%.
Locke said the data “points to systemic issues in advice models, particularly where conflicts of interest and inappropriate use of SMSFs are involved,” emphasising the need for a functioning Compensation Scheme of Last Resort to provide redress for affected consumers.
AFCA’s remit expanded during the year to include Buy Now Pay Later (BNPL) providers, which drew 2,099 complaints. Most involved credit enquiries, unauthorised transactions, and service quality.
General insurance complaints also climbed to 34,231 – a 17% increase – which was mainly driven by add-on insurance. Excluding those, volumes were consistent with recent years.
“Persistently high volumes of complaints about general insurance demonstrates there is more to be done by the sector to prevent complaints reaching AFCA, particularly in cases where escalation could have been avoided if the issue was simply a claim delay. Proactive and clear communication with customers can often be the very thing that stops a complaint from being escalated in the first place,” Locke said.
The full 2024–25 Annual Review is available on AFCA’s website.
