AFCA’s latest Annual Review reveals a challenging year in consumer protection, with record complaint numbers and rising concerns over financial hardship, though a slight dip in scam complaints offers a cautious glimmer of progress. Over 104,000 complaints reached AFCA in 2023-24, an 8% increase from the previous year. Chief Ombudsman David Locke outlined in the report that while complaints remain high, especially regarding scams and financial hardship, early indicators suggest that a coordinated national response might be helping in some areas.
Locke reported that AFCA resolved over 10,000 scam-related complaints this past year, with a resolution rate of 70% within 60 days. Most cases were settled swiftly, with 67% handled at the initial complaint referral stage, and those unresolved moved forward with AFCA’s intervention, leading to partial or full compensation in 60% of cases. Only a small fraction, 2%, escalated to an ombudsman or panel decision.
For the first time, the average monthly scam complaints showed a downward trend by the end of the financial year, with reports dropping from an average of 900 complaints per month to around 500 in recent months. “This decline is encouraging,” said Locke, “but it’s certainly not an indicator for complacency.”
The dip may reflect the impact of government-led initiatives, such as the National Anti-Scams Centre, along with measures like account name verification in some banks. Locke commended these efforts but stressed that more work is needed. AFCA strongly supports the proposed Scams Prevention Framework, a move to introduce mandatory codes for banks, telcos, and digital platforms to protect consumers more effectively. The proposal aligns with the government’s vision for AFCA to act as a central resource for those unable to resolve complaints directly with financial firms.
“While a shift to digital banking may be inevitable,” Locke added, “it’s up to the banks to ensure that these systems are secure for users. Banks, digital platforms, and telecommunications companies can’t afford to wait – they must act now to protect consumers.”
Locke further urged firms to adopt a problem-solving mindset, particularly in scams cases. He highlighted a recent decision where AFCA ordered a bank to pay legal costs and additional compensation due to its handling of a scam case, emphasising that the approach banks take with scam victims can influence outcomes. “It’s not solely a banking issue, though. The actions and inactions of telcos and digital platforms contribute to the persistence of scams. If we’re to tackle this issue effectively, all sectors involved need to step up and actively prevent, detect, and address scams.”
Financial hardship complaints also spiked by 18% during the year, primarily in lending and credit card cases, as more Australians faced economic strain. Locke expressed concern over inadequate responses to hardship applications and highlighted the rise in complaints linked to ineffective communication and lack of support for those in financial difficulty. “Urgent improvements are required,” he said, citing that too many complaints relate to poor handling and limited communication around hardship processes.
Insurance complaints remained a pain point, with premium costs soaring for car and home policies, while customer service appeared stagnant. Locke noted that despite rising premiums, customer service in general insurance has lagged, lacking appropriate resources and resolution-focused engagement.
The Annual Review presents a dual picture: modest progress in scam complaints thanks to national initiatives but ongoing challenges in financial hardship and insurance. AFCA’s message remains clear: consumer protection requires a proactive, united front across banking, telecommunications, and digital platforms.
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