TLDR:

Complaints about scams to Australia’s financial dispute resolution scheme have almost doubled in the past year, according to the Australian Financial Complaints Authority (AFCA). Last year, AFCA received more than 100,000 complaints, with 8,987 of them related to scams. AFCA CEO David Locke said that the increase in complaints is putting “unnecessary pressure” on the system and causing delays for consumers. He called on financial firms to do a better job of handling complaints internally to alleviate the strain on AFCA. Meanwhile, advocates and consumer organizations are calling on the government to take stronger action to combat scams and to force banks to reimburse scam victims.

Key points:

• Complaints about scams have doubled in the past year, says AFCA
• AFCA received more than 100,000 complaints in total in 2023
• AFCA CEO says volume of complaints is putting “unnecessary pressure” on the system
• Advocates and consumer organizations call for stronger action against scams

New figures from the Australian Financial Complaints Authority (AFCA) show that the number of complaints about scams has almost doubled in the past year. In 2023, AFCA received 8,987 scam-related complaints, up from 4,611 in 2022. AFCA CEO David Locke expressed concern about the growing number of people affected by scams and called for anti-scam initiatives by industry and government in 2024. However, he also noted that the increase in complaints is putting “unnecessary pressure” on the dispute resolution system and causing delays for consumers. Locke stated that financial firms need to do a better job of handling complaints within their own internal processes to help alleviate the strain on AFCA.

Among those waiting for an outcome from AFCA is Victorian pensioner Charles Houen, who lost $14,000 to scammers last year. He reported the scam to his bank and to authorities and is now seeking reimbursement from the bank. However, he has faced delays in his case being heard by AFCA due to the significant increase in complaints. AFCA has acknowledged the delays and is working to address them.

Last year, the Australian government announced a range of anti-scam measures to combat the growing problem. The measures include a national taskforce and an SMS sender ID registry. The banking industry has committed to introducing a new confirmation of payee system and implementing new identification checks for new accounts. However, advocates and consumer organizations argue that more needs to be done to combat scams. They have called for the government to introduce legislation similar to that in the United Kingdom, which would force banks to reimburse scam victims. They believe that such legislation would drive investment in anti-scam measures and reduce the burden on AFCA.

The increase in complaints about scams reflects the growing threat of scams in Australia. In 2022, Australians lost over $3 billion to scams, an 80% increase from the previous year. The trend is projected to continue, making it imperative for government and industry to take strong action to protect consumers.