Issues with Investment Product Terms in Australia Jumped by 554%

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The Australian Financial Complaints Authority (AFCA) has received 72,358 complaints in the past 12 months, between July 2021 and June 2022, regarding Australians ’disputes with banks, insurers, super-funds, investment firms and financial advisors.

Announced on Wednesday, there was a 3 per cent increase in the total number of complaints filed at the AFCA this year compared to the previous year.

The agency received a total of 2,078 complaints regarding investment and advisory-related services. The interpretation of product terms and conditions was the area where complaints jumped to 654 from just 100 in the previous year, a jump of 554 percent. Other issues were regarding service quality and failure to follow the agreement.

Furthermore, complaints of inappropriate advice decreased by 54 percent to 241.

The top four banks together accounted for nearly 20,000 complaints, a jump of 10 percent, while complaints against the top four insurers jumped by 19 percent to about 9,400.

The sharp rise in complaints against insurers was due to an earthquake in Victoria and then catastrophic storms and flooding across southern states in several regions. Disaster-related complaints in the period more than doubled to 1,586.

However, the total number of complaints against licensed financial firms decreased by 5 percent compared to the figures of the previous 12 months.

Complaints against credit card issuers were rampant, covering 13 percent of the total companies. Personal transactions are another area where Australians have lodged 7,416 complaints, compared to the previous year’s 5,758 complaints.

Resolving the Complaints

The Australian authority further drew attention to the fact that the successful complaints filed with it secured more than AU $ 200 million in compensation and repayments. Moreover, investigations against some of the ubiquitous issues have resulted in the return of more than AU $ 18 million to customers.

However, the AFCA has paused 1,413 complaints it has received against 14 insolvent firms, including two forex brokers. It is estimated that the total customer claims against these insolvent companies are around AU $ 195 million.

The Australian Financial Complaints Authority (AFCA) has received 72,358 complaints in the past 12 months, between July 2021 and June 2022, regarding Australians ’disputes with banks, insurers, super-funds, investment firms and financial advisors.

Announced on Wednesday, there was a 3 per cent increase in the total number of complaints filed at the AFCA this year compared to the previous year.

The agency received a total of 2,078 complaints regarding investment and advisory-related services. The interpretation of product terms and conditions was the area where complaints jumped to 654 from just 100 in the previous year, a jump of 554 percent. Other issues were regarding service quality and failure to follow the agreement.

Furthermore, complaints of inappropriate advice decreased by 54 percent to 241.

The top four banks together accounted for nearly 20,000 complaints, a jump of 10 percent, while complaints against the top four insurers jumped by 19 percent to about 9,400.

The sharp rise in complaints against insurers was due to an earthquake in Victoria and then catastrophic storms and flooding across southern states in several regions. Disaster-related complaints in the period more than doubled to 1,586.

However, the total number of complaints against licensed financial firms decreased by 5 percent compared to the figures of the previous 12 months.

Complaints against credit card issuers were rampant, covering 13 percent of the total companies. Personal transactions are another area where Australians have lodged 7,416 complaints, compared to the previous year’s 5,758 complaints.

Resolving the Complaints

The Australian authority further drew attention to the fact that the successful complaints filed with it secured more than AU $ 200 million in compensation and repayments. Moreover, investigations against some of the ubiquitous issues have resulted in the return of more than AU $ 18 million to customers.

However, the AFCA has paused 1,413 complaints it has received against 14 insolvent firms, including two forex brokers. It is estimated that the total customer claims against these insolvent companies are around AU $ 195 million.

Source

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