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Annual Review 2025-26: AFCA reports continued rise in complaints

Australian Financial Complaints Authority

The Australian Financial Complaints Authority (AFCA) received the highest number of complaints in its history during the 2025-26 financial year, with almost 120,000 complaints lodged by consumers and small businesses.

Releasing its Annual Review, AFCA Chief Ombudsman and Chief Executive Officer David Locke said the record number of complaints indicates many Australians continue to face financial pressures, and that more needs to be done at industry level.

"Nobody wants to see this number of complaints. The data reinforces the need for firms to resolve issues early where they can,” Mr Locke said.

"Internal dispute resolution is an opportunity for financial firms to put things right, and stop the complaint from escalating to AFCA,” he said.

“We want to be resolving the complex cases that require dispute resolution expertise.”

Complaints increased across every industry, but banking and finance disputes made up more than half of all AFCA complaints for the 12-month period, with 66,971 lodged.

Scams and unauthorised transactions were the top two issues in banking and finance, with 6,580 scam complaints and 6,038 unauthorised transactions complaints.

"Scams and unauthorised transactions continue to cause significant harm and our data shows there is more work to do to stop people falling victim to these sophisticated attacks," said the Chief Ombudsman.

“With our expanded scams role starting in less than six months, preparations are well underway. The Australian Scams Ombudsman, which will be operated by AFCA, will give consumers an independent place to turn when they can’t resolve a scam complaint directly with the organisations involved,” he said.

“But again, effective internal dispute resolution will prevent unnecessary escalation to AFCA.”

The Australian Scams Ombudsman, operated by AFCA, will begin accepting complaints about banks, telcos and digital platforms from 31 March 2027.

For general insurance, 36,022 complaints were lodged, marking a fifth year of growth for the industry. The most complained about product was motor vehicle insurance with 14,430 complaints lodged.

"General insurance complaints have increased every year. While we recognise the impact of climate-related events and supply chain issues, insurers remain responsible for keeping customers informed, explaining delays and communicating clearly throughout the claims process," Mr Locke said.

While complaints about life insurance remained broadly stable, complaints about funeral insurance are a continuing area of concern.

"While funeral insurance complaints are a small part of our caseload, the upward trend is concerning. These policies are intended to support families at a difficult time. Complaints about difficulty cancelling policies and unclear premiums suggest consumers are not getting the information they need about these products."

Superannuation complaints rose sharply in 2025–26, with AFCA receiving 8,755 complaints, up 42 per cent on the previous financial year. Complaints about funds refusing to pay claims rose by 80 per cent.

“As more Australians move into and through retirement, their relationship with their superannuation fund becomes increasingly important. For many people, these funds represent a lifetime of work and financial security in retirement. Funds must take care to respond to members’ concerns and focus on achieving good outcomes wherever they can,” said Mr Locke.

Large-scale investment collapses were the main driver of investments and advice complaints, with complaints about the Shield and First Guardian Master Funds making up the bulk.

Mr Locke said he recognises the stress and uncertainty these investors have already endured, and AFCA remains committed to progressing these matters as quickly as possible.

Financial difficulty complaints rose 17 per cent to 5,566, with financial firms failing to respond to requests for assistance remaining as the top issue.

“People tend to contact financial firms for hardship assistance when they're already under pressure. Firms need to do more to identify hardship early and provide meaningful support for these customers,” the Chief Ombudsman said.

“These complaints should be dealt with promptly and with care. A resolution that comes after months of uncertainty is not the desired outcome for a consumer facing hardship, and it is rarely a good outcome for the financial firm either,” Mr Locke said.

AFCA's complaint data provides valuable insights that can help financial firms improve consumer outcomes and reduce the number of disputes that need to come to AFCA.

“Complaints are already increasing in the first quarter of this financial year and if that trend continues we will receive even higher numbers next year.”

You can read the 2025-26 AFCA Annual Review here.

 

About us:

About AFCA – The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent help with financial disputes. AFCA is a one-stop-shop for consumers and small businesses who have a dispute with their financial firm, over things such as banking, credit, insurance, advice, investments or superannuation. Where an agreement cannot be reached between parties, AFCA can issue decisions that are binding on financial firms.

Contact details:

[email protected]