The Australian Financial Complaints Authority (AFCA) has published its systemic issues insights report for quarters 3 and 4 of the 2023 financial year.
The report contains recent data, case studies and findings from a range of systemic issues cases.
Consumer complaints are a key indicator for systemic issues. When many customers complain about the same issue, either directly to a firm or with AFCA, firms should consider whether the issue raised is a systemic issue.
Financial firms that take accountability for systemic issues and make changes to their culture and ways of working (alongside implementing fixes for immediate issues) can protect against future issues and reduce customer complaints in the long term.
As an example AFCA says that removing manual processes and implementing automated solutions drives efficiencies, reduces repetitive activities and the risk of human error, and can help to minimise issues recurring.
AFCA’s report identifies systemic issues related to banking and finance, general insurance, life insurance, investments and advice, superannuation and small business.
In banking and finance, the report discusses:
- Incorrect credit reporting for customers impacted by fraud;
- Incorrect credit reporting impacting customers experiencing financial hardship;
- Incorrect credit reporting after contract repaid;
- Inappropriate debt collection where customers complied with long-term repayment arrangements;
- Inappropriate debt collection contact with third parties;
- Unclear customer communications in a remediation program;
- System fix failing to resolve calculation errors for loan repayments.
AFCA is required to report to ASIC any serious contraventions of the law and other reportable matters listed in section 1052E of the Corporations Act 2001 (Cth).
AFCA’s identification of systemic issues complements a financial firm’s own obligations to manage systemic issues identified through consumer complaints, as outlined in ASIC Regulatory Guide 271 (RG 271).
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
