Australian Financial Complaints Authority (AFCA) sees a sharp rise in not of complaints received. In the five-month period ended March’19 in comparison to the four-month period ended November’18. Most of the complaints pertained to general insurance and credit products. While investments represented 5 percent of all complaints during the period. The organization has posted details for the second time after its launch last year.
During the five-month period, the AFCA has received 29,873 complaints of the external dispute. This is more than the 23,681 complaints which it got in the first four-month period of its operations. Credit topped the list of products with 45 percent of the total complaints received by the agency. General Insurance followed it with 22 percent of complaints during the period under review. The two segments accounted for over two-thirds of the total complaints received by it. The agency has been posting updates about its work.
There are five issues that dominated complaints in respect of investments. This included 287 complaints in respect of failure to stick to agreement or instructions. While 182 complaints were for inappropriate advice. There are 119 complaints that alleged failure to prove the client’s interests. There were 108 complaints about costs and incorrect fees. While 92 complaints about the quality of service. For all Australian Financial Services (AFS) license holders, membership is compulsory in AFCA. Membership is essential for other financial service providers such as superannuation trustees, credit licensees, and to retail clients. This came on the back of the support extended by the Australian Securities and Investments Commission (ASIC).
About 9 percent of total complaints were in respect of deposit-taking while a similar percentage of complaints were against superannuation. As far as payment systems, there is 7 percent of the total complaints. Though the complaints against general insurance were ranked second, complaints in respect of life insurance were only two percent and ranked eighth. All other complaints accounted for only one percent.
The external dispute resolution forum assumed significance since the Australian Securities and Investments Commission (ASIC) has canceled licenses of two financial services providers for their failure to be members of AFCA. This included New South Wales-based Sydney Business Accounting and A G Calleia & Co. The licenses were canceled in February.