The Australian Financial Complaint Authority (AFCA) has released a new tool that allows consumers to view the number and type of complaints made against any particular financial institution, service or representative.
The tool, named Datacube, was designed for consumers to see if their insurer, bank, financial adviser, superannuation fund or other financial firm has received and responded to consumer complaints.
Users can search by financial firm (i.e. institution name), primary business or service (i.e. mortgage broker, financial adviser), business size, or product group provided (i.e. housing finance, business finance).
The Datacube contains AFCA’s data between 1 November 2018 and 30 June 2019, and will reportedly be updated every six months.
In total, AFCA received 44,988 complaints from consumers, which were initially passed on directly to the financial institution concerned.
A large number were resolved without further interference from the complaints body.
Of those that remained unresolved, 24,665 were accepted and progressed by AFCA for further actions.
Overall, the banking and finance sector accounted for 57.3 per cent of all grievances accepted and progressed by AFCA, with 14,129 complaints.
Of the total complaints actioned against the sector, 20.5 per cent were made in regard to consumer loans (including personal loans and lines of credit) while 20.3 per cent concerned housing finance, and 14.7 per cent related to business finance.
Credit cards received the most complaints, making up 24.5 per cent of the accelerated complaints for the sector.
In the reporting period, there were 2,933 complaints accelerated by AFCA regarding housing finance, 2,091 complaints about business finance and 2,965 complaints for consumer loans (largely comprising of personal loans).
Complaints about lending products therefore made up 54.8 per cent of the total accelerated complaints filed against the banking and finance sector.
Banks face brunt of consumer dissatisfaction
Banks, by far, faced the majority of consumer scrutiny.
Banks (excluding mutuals, credit unions and non-bank lenders) received 16,214 initial complaints, making up 36.0 per cent of total complaints to the body during the reporting period.
Of these, 7,939 were accelerated and actioned by AFCA, meaning banks made up 56.2 per cent of all banking and finance complaints.
For the progressed complaints against the banks, 29.1 per cent related to housing finance, 10.9 per cent were about consumer loans, and 8.5 per cent involved business finance.
The biggest factors that caused consumers to complain about banks included bank accounts (26.7 per cent) and credit cards (24.6 per cent).
Grievances around lending made up 50.0 per cent of all complaints filed against banks, and banks accounted for 51.3 per cent of all lending complaints.
When including banks, mutual banks and credit unions, these lenders account for 84.9 per cent of all complaints filed in the banking and finance sector.
Further, these combined lenders make up 48.6 per cent of all complaints accelerated by AFCA.
Broker complaints a drop in the ocean
In comparison, with 53 complaints in the eight-month reporting window, mortgage brokers made up just 0.1 per cent of total AFCA complaints filed in the data period, and 0.23 per cent of the banking and finance complaints that were accepted and progressed.
Of the 33 complaints that progressed through to the second stage of AFCA’s resolution process, 71.4 per cent were in relation to securing housing finance, and 14.3 per cent related to business loans.
Other complaints involved personal loans (8.6 per cent), credit cards (2.9 per cent) and bank accounts (2.9 per cent).
Of the 7,740 complaints regarding lending products accelerated by AFCA, mortgage brokers were the cause in just 33, or 0.4 per cent of cases.
Additionally, when combining data with finance brokers, who also provided lending advice, complaints totalled 91 in the eight-month reporting period, just 0.37 per cent of all banking complaints that were progressed by AFCA.
Of these 91 complaints, 77 were directly related to lending products, showing that mortgage and finance brokers were related to 1.0 per cent of total grievances over lending products.
Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.
Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency.
Hannah graduated from Macquarie University with a Bachelor of Media and Journalism.