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The financial products giving Australians the most grief during COVID-19
The Australian Financial Complaints Authority (AFCA) has received 7,420 complaints about financial products since the onset of the pandemic.
The financial products giving Australians the most grief during COVID-19
The Australian Financial Complaints Authority (AFCA) has received 7,420 complaints about financial products since the onset of the pandemic.
The new data covers complaints lodged between 3 March 2020 and 31 August 2020, and reveals the extent to which financial institutions did and didn’t support their customers through the early days of the COVID-19 crisis period.
Commenting on the findings, AFCA CEO and chief ombudsman David Locke said “the early impact of COVID-19 can be seen in the spikes in complaints relating to travel insurance and early access to superannuation in particular”.
He highlighted that “with so many travel plans impacted, it was inevitable that there would be a big increase in travel insurance claims as well as disputes regarding ‘chargeback’ requests on credit cards”.
Superannuation also saw a larger number of increase in complaints, especially with the advent of the early access to superannuation scheme.
“With the early access to superannuation, complaints initially related to delays in payments. It was challenging for many superannuation funds to process such a high number of requests in a short period of time,” Mr Locke outlined.
He went on to explain that AFCA worked proactively with the funds to resolve consumer concerns as they arose and to learn any lessons before the second phase of withdrawal requests commenced in early July 2020, resulting in “far fewer complaints during the second early release application period, and it meant consumers were able to get their money sooner”.
Top 10 COVID-19 complaints by product:
- Travel insurance (2,610 complaints)
- Credit cards (910 complaints)
- Superannuation account (817 complaints)
- Home loans (674 complaints)
- Personal loans (398 complaints)
- Business loans (172 complaints)
- Personal transaction accounts (164 complaints)
- Investment property loans (115 complaints)
- Merchant facilities (100 complaints)
- Loss of profits/business interruption (65 complaints)
Top 10 COVID-19 complaints by issue:
- Delay in claim handling (883 complaints)
- Denial of claim (728 complaints)
- Denial of claim-exclusion/condition (720 complaints)
- Financial firm failure to respond to request for assistance (667 complaints)
- Service quality (462 complaints)
- Incorrect premiums (289 complaints)
- Delay (251 complaints)
- Claim amount (194 complaints)
- Incorrect fees/costs (187 complaints)
- Decline of financial difficulty request (177 complaints)
Noting that many Australians are currently struggling through financial difficulty, Mr Locke has encouraged those individuals to seek help now rather than wait.
“If you are struggling to make repayments, we urge you to contact your bank to discuss the best long-term solution for your circumstances,” he said.
Acknowledging that the banks have committed to being fair and reasonable in dealing with consumers at this time, the CEO said “it’s never a good idea to ignore calls and contact from your bank or lender”.
“If you are worried about your circumstances and need independent advice, you can contact the National Debt Helpline on 1800 007 007 or visit ndh.org.au,” he added.
“Where consumers are in financial difficulty and have been unable to reach an agreement with the lender themselves, they can bring the matter to AFCA who may be able to assist to resolve the impasse.”
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