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Financial complaints spike due to COVID-19

  • May 28 2020
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Borrow

Financial complaints spike due to COVID-19

By Grace Ormsby
May 28 2020

AFCA has received more than 3,000 financial complaints since the declaration of the coronavirus pandemic and expects dispute numbers to continue growing through to the end of 2021.

Financial complaints

Financial complaints spike due to COVID-19

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  • May 28 2020
  • Share

AFCA has received more than 3,000 financial complaints since the declaration of the coronavirus pandemic and expects dispute numbers to continue growing through to the end of 2021.

Financial complaints

Justin Untersteiner, chief operating officer of the Australian Financial Complaints Authority (AFCA), was speaking to members at an online forum earlier this week when he revealed the breakdown of the coronavirus-related complaints, which have been seen across banking and finance, insurance and superannuation.

Of the 3,180 total complaints, 1,430 were identified as banking and finance – with 680 of these related to financial difficulty.

A further 1,070 complaints related to general insurance, while 610 were purported as superannuation complaints.

According to AFCA, a majority of the complaints have been about loan break costs, disputed transactions, requests to extend payment terms, denial of travel insurance claims, and delays in the early release of superannuation.

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“Many of these complaints result from poor communication, where a consumer has trouble contacting the firm, does not understand their policy, or is confused about the information they receive,” Mr Untersteiner said.

He is urging financial firms to provide early and proactive communication to consumers.

“We encourage financial firms to ensure their contact details and resources are visible and accessible and allow for genuine engagement with customers to resolve issues early on.”

The COO added that AFCA is anticipating it will receive more financial difficulty complaints arising from COVID-19 in the next six to 18 months from vulnerable consumers and others who struggle to repay mortgages and other debts as government and sector support initiatives come to an end.

“This won’t just be an issue for banking and finance, many will turn to their insurance policies to loom for help, and in some cases, they will not be covered, which will lead to disputes,” he said.

Responsible lending complaints, disputes related to scams, and a rise in business interruption complaints are other areas where AFCA expects to see an increase in workload, alongside additional complaints relating to the early access to superannuation from June until September.

Financial complaints spike due to COVID-19
Financial complaints
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About the author

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Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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