Revealed: Who attracts the most complaints in mortgages?

Last week, the Australian Financial Complaints Authority (AFCA) released its six-monthly update of the AFCA Datacube, which makes data on complaints publicly accessible to financial firms and consumers.

Financial firms that received four or more complaints during a time period appear in the AFCA Datacube.

The data gives member firms a statistical understanding of how they compare within their industries.

It can also help consumers and small businesses make informed choices when sourcing financial products and services.

The AFCA Datacube can be searched by firm name or filtered by type of firm, product, service, or postcode. It includes data since AFCA’s inception on 1 November 2018.

The resolution process

There are three stages in AFCA’s resolution process: registration & referral, case management, and decision.

AFCA first refers the complaint to the broker, aggregator, or lender and request a response. If a complaint is unresolved, it gets referred to the case management stage.

Once investigated and if no resolution is available, a decision will be made in favour of the complainant or the business.

Major bank: CBA

Using the AFCA Datacube to search for ‘Housing finance’ creates a long list of organisations from ‘very large’ major banks to ‘very small’ ACLs.

Unsurprisingly, Australia’s biggest bank, CBA, is at the top of the list with 494 complaints related to housing finance over the six months to December 2022.

Housing finance represents just over 20 per cent of the 3,792 complaints made against the bank over the period.

CBA paid $8.4 million to complainants over the six months, though the data does not reveal how much of this was directly related to housing finance.

The major bank has paid a total of $77.1 million to complainants since November 2018.

Second-tier lender: St.George

While it is technically part of Westpac, St.George is widely considered among brokers to be a second-tier lender. Out of all the major bank subsidiaries, it received the most complaints (148) over the six months.

Interestingly, AFCA categorises St.George Bank as a ‘very small’ business. By contrast, Suncorp falls under AFCA’s ‘very large’ category.

Under a quarter (22.1 per cent) of the total 788 complaints made against St.George over the six months to 31 December were about housing finance. The bank paid $780,200 to complainants over the period and has paid approximately $9.5 million since November 2018.

Other lenders: Pepper, Advantedge, and Bluestone

AFCA categorises Pepper Money and Advantedge as ‘Credit providers’ and Bluestone as a ‘Mortgage manager’. There is no non-bank category on the AFCA Datacube.

However, on a list of all home finance providers in Australia, Advantedge (61 complaints over the six months) was slightly ahead of Pepper Money (58). It is worth noting that AFCA categorises Advantedge as a ‘large’ business and Pepper as a ‘very small’ business.

Advantedge paid $68,600 to complainants over the six months to December 2022, while Pepper Money paid $50,100.

Non-bank lender Bluestone saw the greatest complaints in the ‘Mortgage manager’ category (35) and paid $29,900 to complainants over the period.

Since 1 November 2018, Bluestone has paid just over $1 million to complainants.

Property investors: ANZ

Major bank ANZ saw the largest number of complaints over the six months for investment home loans.

Sixty-four investors lodged complaints with AFCA, of which more than half (57.8 per cent) were resolved quickly. However, 23 complaints progressed to case management and four were resolved in favour of the complainant.

Aggregators: Connective

In the ‘Mortgage aggregator’ category, Connective received the greatest number of complaints over the six months to December (13), followed by Finsure (12) and AFG (10). All three aggregators were categorised as ‘very large’ businesses.

Of the 13 complaints made against Connective over the six months, three were resolved at the resolution & referral stage, 11 progressed to case management, seven were closed at case management, and five were resolved by agreement.

Connective paid $78,500 to complainants over the period. Since November 2018, Connective has paid a total of $476,500.

Mortgage brokers: Lendi

Drilling down into the data, AFCA figures showed that in the six months to 31 December, Lendi received the most complaints in the ‘Mortgage broker’ business category.

Auscred Services Pty Ltd, the trading name of Lendi, received 14 complaints over the six-month period, six of which were resolved at the registration & referral stage.

Eight complaints made against Lendi were progressed and seven were closed at the case management stage.

Lendi paid $28,800 to complainants over the half year and $87,200 since November 2018. 

It is important to note that larger organisations with more customers often proportionately receive more complaints. However, AFCA categorises Lendi as a ‘medium’ sized business, rather than ‘large’ or ‘very large’.

Since November 2018, the mortgage broking businesses that have received the most complaints are Connective’s BLSSA Pty Ltd (109), Mortgage Choice (59), Auscred (58), and Dargan Financial (11).

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