AFCA delays 'causing distress', says broker

AFCA delays ‘causing distress’, says broker

23 March 2023

An experienced broker has criticised the Australian Financial Complaints Authority (AFCA), saying that “considerable” dispute delays are causing distress to clients.

The broker, who asked not to be named, says one of his clients has a dispute in relation to a house fire that has still not been referred to a panel nine months after the complaint was lodged.

“I don’t know whether it’s blatant inefficiency, or a lack of KPIs, but justice delayed is justice denied,” he told insuranceNEWS.com.au.

“Consumers shouldn’t be waiting six to nine months for resolution, and insurers could be hit by months of extra interest payments because of the delays.

“Maybe the Australian Securities and Investments Commission needs to have better oversight, and impose some staffing requirements for external dispute resolution as well as internal dispute resolution.

“AFCA needs to pick up its game and do better.”

The broker says AFCA is more lenient to insurers than consumers on deadlines.

“Certain deadlines are requested,” he told insuranceNEWS.com.au.

“If the complainant doesn’t respond in that time, then the complaint is almost shut down. But if the financial firm misses a deadline there are repeated extensions. Insurers are being allowed constant extensions of time.”

The broker says AFCA is the only viable dispute resolution option for many consumers and it is vital that it operates effectively.

“Most people don’t have the resources to spend $40,000 on litigation.”

As previously reported, AFCA says a surge of complaints has caused delays in its system and it has outlined a series of measures to tackle the problem. However, it says insurers are partly to blame because they are not handling complaints properly before they reach AFCA.