The Australian Financial Complaints Authority (AFCA) published a report for the 2019/20 financial year showing that by industry type, insurers dominated with 38 per cent of the 4,773 Covid-19-related disputes that were lodged against financial service providers.
AFCA said the disputes received represented a 13.7-per-cent rise in monthly complaints from the previous financial year. About $258.6 million was secured in compensation and refunds to consumers.
The dispute mediator resolved 78 per cent of cases and 73 per cent of the complaints were settled by agreement or in favour of complainants.
Drew MacRae, Policy and Advocacy Officer, said: “We too have had an abundance of calls regarding problems arising out of travel insurance claims, refunds and credit. Travel insurance made up 78 per cent of Covid-19 related calls to our Insurance Law Service.
“We have also seen Covid-19 compounding issues faced by those experiencing insurance problems from the Black Summer fires and other catastrophes that occurred earlier this year.”
Tom Abourizk, Policy Officer, added: “This is very concerning because we expect financial difficulty to increase when short-term Covid-19 relief measures expire. The fact that 73 per cent of complaints made to AFCA were settled in favour of the consumer indicates that internal dispute resolution processes are still not resulting in fair outcomes.
“The financial service providers are supposed to be the experts; they should not be making the wrong decision this often.”