Ombudsman David Locke ‘deeply concerned’ about rising bank complaints

afr.com:

Financial services customers are getting angry as cost-of-living pressures bubble over, triggering a record number of complaints with the Australian Financial Complaints Authority over the past year.

AFCA chief ombudsman David Locke said he was “deeply concerned” about the 96,987 complaints in the year to June, up 34 per cent. The numbers pointed to a growing number of borrowers unable to access bank “hardship” policies when they were struggling to repay loans, he added.

And despite the findings of the Hayne royal commission four years ago – which uncovered widespread mistreatment of customers – Mr Locke said AFCA is “still seeing systemic issues and contraventions of law” relating to banks’ systems, processes and conduct, leading to a higher number of referrals to the Australian Securities and Investments Commission.

AFCA chief executive David Locke. “We are still seeing systemic issues and contraventions of law.” Paul Jeffers

Complaints from customers in financial difficulty rose 9 per cent over the year to 4849 but were up 31 per cent in the June quarter. AFCA said financial stress from successive interest rates hikes and other cost-of-living pressures “became increasingly evident” over the period.

While major banks are resolving hardship cases sooner, Mr Locke pointed to a “toughening of approach” with borrowers who have gotten in too deep. This included “more enforcement actions and more repossession actions than we have seen for a long time”, as banks forced some customers to sell their homes, pushing them into an even tougher rental market.

It is not only banks causing growing frustrations for customers. Complaints about buy-now, pay-later providers rose 57 per cent over the year, relating to issues including late