Skip to content
Finance Investment

Small businesses complaints to AFCA up 9 per cent

Australian Financial Complaints Authority 3 mins read

Small businesses in dispute with financial service providers took 3,807 complaints to the Australian Financial Complaints Authority (AFCA) in 2022-23, a rise of 9 per cent on the previous financial year.

Small businesses secured $23.4 million from financial firms in compensation and refunds after coming to AFCA, up 16 per cent on $20 million the previous financial year.

But AFCA’s Lead Ombudsman for Small Business, Suanne Russell, told AFCA’s recent Member Forum that the national financial dispute resolution service had not seen the increase in financial difficulty complaints that might have been expected amid difficult global and domestic economic conditions.

Financial difficulty complaints related to small business lending fell 1 per cent to 475 complaints in 2022-23.

“This decrease was not what we were expecting, particularly when we hear of increases in personal and corporate insolvency,” Ms Russell said. “Obviously, this is an area we are watching closely to see if the position changes.

“Small businesses have proven to be incredibly resilient in the aftermath of COVID and in the current economic environment, with increased costs and rising interest rates,” she added.

Business loans were again the most commonly complained about financial product – accounting for about one in three small business complaints received by AFCA. However, the 1,347 complaints about loans was a fall of 7 per cent from the previous year. (See the tables below for further detail.)

The top five products were rounded out by complaints related to business transaction accounts, commercial property, credit cards and commercial vehicles.

Service quality was the top issue in small business complaints, though this type of complaint was down 21 per cent. The top five issues were rounded out by unauthorised transactions – a category that includes scam activity – financial firm failure to respond to a request for assistance, denial of an insurance claim due to an exclusion or condition, and insurance claim amount.

AFCA provides an independent and impartial financial complaints resolution service that is free for small businesses and consumers.

Overall, it received a record 96,987 complaints in 2022-23, an unprecedented rise of 34 per cent.

Small business complaints accounted for about 4 per cent of those complaints, with the remainder coming from individual consumers.

Not all small business lenders are required to be members of the AFCA Scheme, Ms Russell noted. Membership is mandatory for Australian Financial Services and Australian Credit License holders and is a condition of codes of practice such as the Online Small Business Lenders Code, but lenders who lend only to small business do not need an AFSL or ACL and therefore do not have to belong to the AFCA Scheme.

Nearly half (48%) of small businesses’ complaints were resolved within 60 days of being lodged with AFCA.

AFCA opened its doors on 1 November 2018 and has just marked its fifth anniversary. In that time AFCA has helped to secure $106 million in compensation and refunds for small business complainants, after registering more than 20,000 complaints from small businesses.

 

Top 5 products

Type of complaint

No.

Change

Business loans

1,347

-7%

Business transaction accounts

1,002

25%

Commercial property

374

36%

Business credit card

304

51%

Commercial vehicles

153

28%

 

Top 5 issues

Type of complaint

No.

Change

Service quality

309

-21%

Unauthorised transactions

299

62%

Firm failure to respond to request for assistance

268

-5%

Denial of insurance claim due to exclusion/condition

225

31%

Insurance claim amount

200

53%

 


About us:

About AFCA - The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent dispute resolution to individual consumers and small businesses when they are not able to resolve complaints directly with financial firms in banking and finance, insurance, investments and advice, and superannuation. AFCA aims to help the parties reach agreement, but it can issue decisions that are binding on financial firms. 


Contact details:

media@afca.org.au

Media

More from this category

  • Finance Investment
  • 14/02/2025
  • 21:10
Bitget Limited

Bitget Secures Virtual Asset Service Provider license in Bulgaria Aligning with its EU Expansion Plans

VICTORIA, Seychelles, Feb. 14, 2025 (GLOBE NEWSWIRE) -- Bitget, the leading cryptocurrency exchange and Web3 company, has obtained a Virtual Asset Service Provider (VASP) license from Bulgaria's National Revenue Agency. The official licensing now enables Bitget to offer a comprehensive suite of crypto services within Bulgaria, including the exchange, trading, transfer, custody, and public offering of crypto assets, as well as wallet services. This aligns with Bitget's broader plans of obtaining EU's Markets in Crypto-Assets (MiCA) license, which will boost its foothold in the region.The VASP license in Bulgaria aligns with Bitget's strategic expansion across the European Union. The company…

  • Business Company News, Finance Investment
  • 14/02/2025
  • 16:20
Visby Management

Visby Management Doubles Initial Cash Payment Above Tiger Gold Offer For LCL Resources Colombia Assets

Visby Management February 13, 2025 On February 11, 2025 Visby Management (“Visby”), an international mine operator with operations in Colombia, made two binding offers to Los Cerros Limited (“LCL”) for the purchase of the company’s Andes and Quinchia Colombia assets. Offer A is a $6,000,000 AUD all-cash offer with the full amount to be paid within one year. Offer B is a cash and stock offer identical to the offer made by Tiger Gold Corporation with an additional $1,000,000 AUD up-front payment. The total up-front payment offered by Visby in Offer B is $2,000,000 AUD. Visby requested that both offers…

  • Finance Investment
  • 14/02/2025
  • 09:41
Jacobi

FE Investments selects technology vendor Jacobi to accelerate growth of its Managed Portfolio Service (MPS)

BRISBANE, Australia, Feb. 13, 2025 (GLOBE NEWSWIRE) --  FE Investments (FEI) has selected technology vendor Jacobi Strategies (Jacobi) to enhance the discretionary fund manager’s model portfolio capabilities. Jacobi’s institutional-grade investment technology will be used to amplify and industrialise FEIs’ model portfolio risk monitoring, forward-looking analytics and model portfolio design processes.As part of their usage of Jacobi, FEI will integrate a range of proprietary models, tools and processes into their own private version of the software.As one of the top 10 MPS managers by assets, FEI will also strengthen their model portfolio reporting and engagement capabilities, reinforcing their commitment to best-in-class client service.Rob…

Media Outreach made fast, easy, simple.

Feature your press release on Medianet's News Hub every time you distribute with Medianet. Pay per release or save with a subscription.