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Speaker 1: Financial complaints have risen in the last year, the Australian

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Speaker 1: Financial Complaints Authority saying they're disappointed yet another record year

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Speaker 1: of complaints. Disputes reaching the Ombudsman Service rose nine percent.

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Speaker 1: More one hundred and five thousand complaints regarding financial matters

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Speaker 1: in twenty twenty three twenty four. Not all the order

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Speaker 1: abuse obviously, but I imagine some might be. But regardless, that's

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Speaker 1: a lot of complaints over financial issues. Justin Untersteiner is

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Speaker 1: Chief Operating Officer of the Australian Financial Complaints Authority and

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Speaker 1: joins me now Justin.

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Speaker 2: Good morning, good morning, thanks for having me, Matthew.

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Speaker 1: That's concerning, isn't it that many complaints over the year,

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Speaker 1: and over a range of issues, I imagine banking, superannuation,

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Speaker 1: the whole gamut.

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Speaker 2: Absolutely, As you mentioned, we received over one hundred and

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Speaker 2: five thousand disputes and as a result of that we

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Speaker 2: awarded over three hundred and fourteen million dollars in compensation

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Speaker 2: and funds to consumers and small businesses. And just a

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Speaker 2: year ago we reported that we had seen a thirty

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Speaker 2: four percent increase in disputes lodged with our service, which

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Speaker 2: was just completely unpre precedented. We really had hoped to

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Speaker 2: see a decrease, a downturn in those disputes, but unfortunately

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Speaker 2: we've seen a further ten percent or close to ten

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Speaker 2: percent increase. And whilst the scale of the increase we

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Speaker 2: experienced it a year ago isn't there, these record numbers

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Speaker 2: are still far too high, and we're really disappointed.

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Speaker 1: What sort of complaints so they what are the issues

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Speaker 1: that people are complaining about us? Scams part of it

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Speaker 1: that's that's out of your hands. I imagine, Well.

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Speaker 2: There are three key drivers of complaints to our service

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Speaker 2: at the moment, and you've named one of them. It's disappointingly.

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Speaker 2: We received an eighty one percent increase in complaints about scams,

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Speaker 2: and what that looks like for US, it's where a

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Speaker 2: consumer complaints to us about the conduct of a bank

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Speaker 2: in protecting their money when money leaves a bank account

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Speaker 2: through a scam. We also saw continued high general insurance

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Speaker 2: complaints with comprehensive motor vehicle insurance currently a hotspot for

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Speaker 2: US and for the sector and for consumers. And then

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Speaker 2: also we saw a fourteen percent increase in hardship complaints.

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Speaker 2: And what that means is it's where a consumer is

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Speaker 2: in some kind of financial difficulty that approached their bank

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Speaker 2: or credit providers to get some help, but they haven't

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Speaker 2: got the response that they're looking for. And you know,

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Speaker 2: obviously we know many a streams are doing it tough

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Speaker 2: at the moment, So that is an area that we're

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Speaker 2: watching very closely.

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Speaker 1: Do financial institutions have an obligation to someone doing it tough?

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Speaker 2: Oh, they do. There are obligations under the law to

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Speaker 2: first of all respond to a request for hardship and

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Speaker 2: then to provide a tailored response as well. And I

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Speaker 2: guess what we're seeing is that consumers who are in

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Speaker 2: financial difficulty are doing the right thing, and we do

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Speaker 2: encourage people to reach out to their bank or credit

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Speaker 2: provider as early as possible. Right thing to do. But

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Speaker 2: in some cases when they do that, they're either not

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Speaker 2: getting a response, or more often than not, they're getting

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Speaker 2: what I would refer to as a cookie cutter response,

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Speaker 2: which means it's a response it's really not tailored to

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Speaker 2: the issue that the consumer's facing. And so yeah, the banks,

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Speaker 2: for instance and others have obligations to provide a more

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Speaker 2: tailored response. And I guess what we don't want to

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Speaker 2: see is complaints where a once salvageable situation is now

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Speaker 2: die with people's lives falling apart as the results. We

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Speaker 2: are asking the banks and credit for writers to do

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Speaker 2: a lot more.

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Speaker 1: Okay, So if someone turns up to the bank and says, look,

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Speaker 1: cost of living, I can't afford to meet my mortgage

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Speaker 1: at the moment, what is the bank obliged to do

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Speaker 1: in that regard, Well.

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Speaker 2: They're obliged to appropriately and reasonably consider that request and

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Speaker 2: then to work with that consumer. So now, sometimes sometimes

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Speaker 2: sometimes the position is to die and you know, and

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Speaker 2: the outcome might be an outcome that the consumer is

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Speaker 2: not looking for. But most of the time what we

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Speaker 2: do see is that the banks and credit providers do

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Speaker 2: a good job at that stage once they have truly

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Speaker 2: engaged with that consumer to find ways around it. So

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Speaker 2: good example is if someone's behind in mortgage payments, they

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Speaker 2: might give them some space, some extra space, they might

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Speaker 2: move the loan to say interest only for a period.

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Speaker 2: They might do other things to make sure that that

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Speaker 2: remains affordable. Because it's actually in everyone's best interest, in

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Speaker 2: banks and the consumers and everybody's best interest that they

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Speaker 2: can continue to maintain and.

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Speaker 1: Pay that loan, Okay, but it would be no doubt

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Speaker 1: in a consumer's best interest to get on top of

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Speaker 1: it sooner than later.

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Speaker 2: Yeah, Look, we will always encourage consumers not to hold out.

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Speaker 2: I know, you know, when people are in financial difficulty,

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Speaker 2: it can be very difficult and stressful, and some people

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Speaker 2: are even embarrassed, you know, I understand that, But I've

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Speaker 2: got to remember, it's a challenging environment out there right now,

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Speaker 2: a lot of people are doing it tough. We've seen

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Speaker 2: large number of interest rate rises, we're seeing high cost

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Speaker 2: of living pressures, and so again, you know, what we're

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Speaker 2: really urging consumers to do is not to be afraid

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Speaker 2: to address these issues with our lender. Don't wait until

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Speaker 2: overdue repayments and areas are already really building up a quickly,

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Speaker 2: so there are more options available to And just remember too,

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Speaker 2: we encourage people to seek help from a free financial

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Speaker 2: counselor as well as it's needed. So, for instance, consumers

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Speaker 2: can contact the free National Debt Helpline on one eight hundred,

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Speaker 2: double O seven, double O seven again if you feel

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Speaker 2: like he need some help through that process.

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Speaker 1: All right, let's talk about scams, So people saying the

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Speaker 1: bank isn't doing enough to protect me. After all the advice,

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Speaker 1: all the constant messaging about be careful and everything else.

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Speaker 1: Is a bank obliged to protect someone who's willingly handed

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Speaker 1: over money.

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Speaker 2: Well, the first thing I would say is, you know,

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Speaker 2: we do hear a message out there about all consumers

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Speaker 2: and bank customers. They've got to do more, you know,

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Speaker 2: they've got to they've got to do more to protect

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Speaker 2: themselves in a people fall for these Reilly scams sometimes,

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Speaker 2: like I think those days are past. Really, of course,

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Speaker 2: we all need to take care, we really do.

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Speaker 1: You know.

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Speaker 2: I always encourage anybody around me, my parents and family,

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Speaker 2: don't click on links and text messages and you know,

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Speaker 2: and take those precautions. But the reality is the nature

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Speaker 2: of scams that we are seeing today are so much

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Speaker 2: more sophisticated than what we saw several years ago that

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Speaker 2: I don't think it's fair to suggest to consumers that

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Speaker 2: it's their fault. And so my view is absolutely we

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Speaker 2: need to see the industry and the bank's doing more

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Speaker 2: to protect the money of consumers. We absolutely do now. Pleasingly,

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Speaker 2: although we saw really high numbers, we did see for

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Speaker 2: the very first time in several years. A decline in

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Speaker 2: scam relays of complaints in the last couple of months

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Speaker 2: of the year, and we do think that comes back

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Speaker 2: to some of the work that the government has been

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Speaker 2: doing to prevent scams as well as some of the

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Speaker 2: work that the industry has been doing. But it is

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Speaker 2: still far too high, and it's why we welcome further

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Speaker 2: announcements that the government has made to introduce mandatory codes

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Speaker 2: of practice which will set a standard that must be

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Speaker 2: met by the banks, by the telcos, as well as

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Speaker 2: digital platforms too. And I think that's really important if

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Speaker 2: we want to see the right level of investment by

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Speaker 2: industry to protect us from scams. I think having better

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Speaker 2: regulation and better legislation out there will certainly help.

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Speaker 1: And the third issue the comprehensive motor vehicle insurance. What's

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Speaker 1: been the deal with that.

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Speaker 2: Look, we're really disappointed. We've seen a high level of

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Speaker 2: complaints flowing out of the general insurance sector now for

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Speaker 2: several years. We've been trying to work with a sector

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Speaker 2: for several years and it is disappointing to see high

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Speaker 2: numbers again. But yeah, we did see an increase in

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Speaker 2: comprehensive motor vehicle insurance disputes as the hot spot at

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Speaker 2: the moment. In fact, it became the most complained about

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Speaker 2: insurance product overtake home building insurance for the first time.

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Speaker 2: And so what we are seeing there is really the

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Speaker 2: key driver are delays in processing insurance claims that relate

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Speaker 2: to comprehensive motor vehicles, so when someone's been in an accident,

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Speaker 2: for instance. And now what I know is there was

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Speaker 2: a report released last year that said or that shared

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Speaker 2: information that there is a major skill shortage at the

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Speaker 2: moment in the motor vehicle repair industry, and that does

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Speaker 2: create legitimate challenges for insurers. I do understand that in

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Speaker 2: trying to process these kind of claims quickly, but in

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Speaker 2: saying that, a lot of the complaints that we receive

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Speaker 2: it's not so much about the delay, it's actually about

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Speaker 2: the lack of communication, updates and updates from the insurer.

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Speaker 2: And so what we want to see is INSURAN is

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Speaker 2: leaning more ensure that having regular contact with their policyholders

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Speaker 2: to keep them up to date. You know, we often

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Speaker 2: hear from consumers that they get you know, they get

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Speaker 2: given a deadline when something will happen and then nothing happens.

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Speaker 2: You know, it's really important that are doing more to

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Speaker 2: keep in touch with the customers. And look, I will

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Speaker 2: say there are a couple of large insurers that have

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Speaker 2: really leaned in and doing some good work, but unfortunately

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Speaker 2: it's just not consistent across the industry.

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Speaker 1: And given the premium rises of the last couple of years,

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Speaker 1: you'd expect them to be doing everything they can to

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Speaker 1: try and help you. Anyway, that's a nice story.

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Speaker 2: No, absolutely, And look, I think it's just regardless. I

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Speaker 2: think consumers take out insurance, you know, really with the

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Speaker 2: view that there's a promise there that they will be

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Speaker 2: supported at their time and need. And so I don't

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Speaker 2: think it's good enough that consumers are in a position

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Speaker 2: where they don't know what's going on and they've got

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Speaker 2: these extraordinary delays. You know, I shared an example. It's

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Speaker 2: a bit of an old example. Now this I will

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Speaker 2: admit this was you know, about eighteen months ago, but

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Speaker 2: where I had a small flood in my backyard. It

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Speaker 2: cause some damage and I couldn't secure my property. We

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Speaker 2: lodged the claim with my insurer. It took a long

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Speaker 2: time to process the issue. There wasn't labor or part

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Speaker 2: because I had someone ready to fix it. When I

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Speaker 2: we try and call the insurer'd be on hold on

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Speaker 2: their on their in the cautins for two hours, right,

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Speaker 2: and so those kind of things just aren't good enough. Right.

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Speaker 2: We expect better than that, and we're certainly encouraging the

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Speaker 2: industry to step up.

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Speaker 1: Justin for anyone with concerns and wants to get in

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Speaker 1: touch with the authority, what's your best number?

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Speaker 2: Well, our so our phone number is one eight hundred

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Speaker 2: nine three one six seven eight. Or you can jump

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Speaker 2: onto onto the internet, onto Google and type AFCA for

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Speaker 2: AFKA AFCA and you'll see our website up pop up.

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Speaker 2: What I would say is if you do have an

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Speaker 2: issue or a complaint the bank or insurer or super funds,

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Speaker 2: the first step is to go back to the bank

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Speaker 2: or insurance fund or the insurance company or the super

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Speaker 2: fund and seek to speak to their complaints department. That's

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Speaker 2: the first step. They've got obligations to have a complaints department.

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Speaker 2: But if you still aren't satisfied, you can call us

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Speaker 2: one eight hundred nine three one six seven eight. We're

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Speaker 2: free to use. We're easy to use. You do not

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Speaker 2: need representation. We can walk you through that process and

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Speaker 2: Our goal is to work between you and the financial

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Speaker 2: firm to try and find.

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Speaker 1: Resolution and not a two hour wait, presumably on your

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Speaker 1: call service.

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Speaker 2: No, absolutely not good.

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Speaker 1: I'm justin appreciate the time.

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Speaker 2: Thank you, thank thanks so much, Have a great day.

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Speaker 1: To Justin Untersteiner, who is Chief Operating Officer Australian Financial

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Speaker 1: Complaints Authority on an increase in financial complaints and three

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Speaker 1: main areas people dissatisfied with scams with motor insurance, comprehensive

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Speaker 1: motor insurance at that and the third issue being that

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Speaker 1: of hardship and trying to keep up with payments and

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Speaker 1: getting poor responses from banks and the like. On that