In the past financial year, the Australian Financial Complaints Authority reported a record high number of scams, with more than 10,000 complaints from consumers and small businesses. This marked an 81% increase from the previous year. However, there was a downturn in the last quarter of the year, which has continued into the new period. The chief ombudsman, David Locke, noted that while this is encouraging, it is not a cause for complacency. Anti-scam initiatives launched by the federal government and big banks have helped reduce numbers, but there is still a long way to go in combating scams.
Of the complaints reported, seven in 10 where consumers were scammed out of money were resolved within 60 days. However, the review also found that more Australians are facing financial difficulties, with complaints related to home, personal, and credit card lending increasing by 18%. This rise is driven by concerns surrounding poor treatment or ineffective communication during the hardship application process. Locke emphasizes the need for urgent improvements in this area to better support consumers facing financial challenges.
Another concerning trend highlighted in the review is the record level of premium growth in car and home insurance over the past two years. Despite this, there has been a lack of action regarding appropriate resourcing, product design, and the adoption of a resolution mindset. Locke stresses the importance of addressing these issues to ensure better outcomes for consumers. The authority is disappointed with the lack of progress in this area and calls for industry stakeholders to take action to improve the situation.
While the number of reported scams has decreased in the last quarter of the financial year, there is still concern about the prevalence of scams targeting Australians. The anti-scam initiatives implemented by the federal government and big banks have had some success, but more work needs to be done to protect consumers and small businesses from falling victim to fraudulent schemes. The authority remains vigilant in monitoring and addressing scams to ensure that consumers are adequately protected and supported.
In addition to scams, the review also highlights the increasing financial difficulties faced by Australians, particularly in the areas of home, personal, and credit card lending. Complaints related to these issues have risen by 18% in the past year, driven by concerns around poor treatment or ineffective communication during the hardship application process. Urgent improvements are needed in this area to ensure that consumers receive the support and assistance they require to navigate financial challenges.
Overall, the annual review by the Australian Financial Complaints Authority underscores the need for ongoing efforts to address scams and financial difficulties faced by consumers. While some progress has been made through anti-scam initiatives and complaint resolution processes, more work is needed to protect consumers and ensure fair treatment in financial services. The authority continues to work towards improving outcomes for consumers and pushing for industry stakeholders to take action to address key issues identified in the review.
