Australians lodged more complaints last financial year against banking, finance and insurance firms than ever before. Photo: Moon Safari.
There were more complaints lodged with the financial sector’s referee in 2025-26 than ever before, revealing an increasing dissatisfaction with banking services across the nation.
In total, a record 119,949 complaints were lodged with the Australian Financial Complaints Authority (AFCA) in the financial year, the highest number and the third consecutive year in which complaints have exceeded 100,000.
Banking and finance remained AFCA’s largest complaint area, with financial difficulty complaints increasing 17 per cent and credit reporting complaints rising 22 per cent across the year, with a steep rise in recent months.
The three most complained about financial products in 2025-26 were personal transaction accounts, motor vehicle insurance and credit cards.
The top three issues were delay in claim handling, service quality and claim rejection.
AFCA’s chief customer officer Deborah Jenkins said three years of more than 100,000 complaints exposes a concerning level of challenge many consumers continue to face while trying to navigate a difficult economic environment.
“These numbers highlight the impact that ongoing cost-of-living challenges and economic uncertainty are having on consumers, and the flow-on effects these conditions can have across the financial system,” Ms Jenkins said.
“Every complaint represents someone’s experience, and collectively they provide a view of where consumers are struggling.”
AFCA said financial institutions could work with it and act on the data’s insights to help prevent recurring issues that lead to complaints.
It said complaint data is one of the clearest signals companies have about what is going wrong for their customers.
“Firms that use those insights to improve are more likely to prevent the same problems happening again,” Ms Jenkins said.
“These numbers point to opportunities for firms to strengthen hardship support, improve communication with customers and ensure accurate credit reporting, helping resolve issues before they become disputes.
“While most financial advice firms do the right thing, we are seeing a significant number of complaints stem from major financial collapses that have affected thousands of consumers.
“These matters are complex and can be incredibly stressful for individuals and their families.”
While complaint volumes increased across all areas during 2025-26, the largest growth was driven by major investment collapses and rising superannuation disputes.
AFCA’s preliminary data snapshot as at 30 June showed banking and finance received 66,971 complaints (up 23 per cent); general insurance 36,022 complaints (up 5 per cent); superannuation 8755 complaints (up 42 per cent); investments and advice 6542 complaints (up 56 per cent); and life insurance 1561 complaints (up 3 per cent).
ACFA noted that complaints about investments and advice had increased by 56 per cent, primarily due to the collapses of the Shield Master Fund and First Guardian.
Complaints alleging failure to act in the client’s best interests remain the top issue, with a 65 per cent increase over last year, to 2081.
The rise in complaints against superannuation services was mostly due to delays in claim handling, service issues and rejection of superannuation insurance claims.
Rejection of claim complaints increased 82 per cent compared with the previous year.
Scam complaints rose 12 per cent to 6706 following a decline the previous year, reflecting the continued threat scams pose to Australian consumers.
“Scammers are becoming more sophisticated in how they target consumers,” Ms Jenkins said.
“Resolving disputes is important but preventing scams before they happen is even better. That’s why broader scam prevention efforts are so important.”
While general insurance complaints remained persistently high, the data shows early resolution remains an important feature of the system.
All up, 43 per cent of complaints were resolved before progressing through AFCA’s formal decision-making process.
Comprehensive vehicle insurance has considerable room for improvement. It was again the most complained-about insurance product – with claim rejection complaints increasing by 47 per cent in the financial year.
Since starting operations in 2018, AFCA has received about 690,000 complaints, helping to secure $2.6 billion in compensation or refunds for consumers and small businesses.
Wednesday’s (4 August) data release for 2025-26 is preliminary; some numbers are expected to change after further analysis and classification.
AFCA’s full data will be available in its annual review later this year.
Original Article published by Chris Johnson on Region Canberra.
