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Most common financial complaints from small business in 2019–20

Adrian Flores
Adrian Flores
09 November 2020 1 minute readShare
financial complaints

The Australian Financial Complaints Authority has revealed the top five sources of complaints from small businesses during the 2019–20 financial year.

According to AFCA’s 2019–20 annual report, it received 4,172 small-business complaints between 1 July 2019 and 30 June 2020. Out of those complaints, 3,933 were closed and more than $27 million in compensation was awarded or obtained.

By product, the most common source of complaints from small businesses was business loans (1,570 complaints), followed by business transaction accounts (510 complaints) and hire purchase and leases (234 complaints).

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This was followed by complaints relating to commercial property (232 complaints) and business credit cards (217 complaints).

By issue, the leading complaints from small businesses related to appropriate lending (426 complaints), financial firm failure to respond to request for assistance (382 complaints) and credit reporting (284 complaints).

 

Failure to follow instructions/agreement (214 complaints) and service quality (209 complaints) rounded out the top five sources of complaints by issue.

AFCA said it also considered complaints about lease equipment finance for small businesses and consumers. However, it noted that a number of these complaints were about the underlying asset or asset provider.

The average time for a small-business complaint to be closed was 92 days.

Overall, AFCA received 80,546 complaints from consumers and small businesses, which is a 14 per cent increase in the monthly average compared with the last financial year.

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Despite the increase in complaints, AFCA chief ombudsman and chief executive David Locke said the agency was able to resolve the majority of complaints quickly, with complaints taking an average of 73 days to reach an outcome.

“Speedy resolution allows consumers to get on with their lives, and AFCA’s process is designed to support all parties to a complaint to reach an agreement as early as possible,” he said.

Mr Locke also noted the significant impact of COVID-19 on Australian consumers, small businesses and the Australian financial services industry during 2019–20.

“The massive and almost immediate economic impact of job losses and business shutdowns has been felt across the financial services industry, with consumers suddenly in hardship, businesses losing income, and insurance claims and chargeback requests being made as travel plans were cancelled, and superannuation funds rapidly implementing cash payments to thousands of claimants,” he said.

Most common financial complaints from small business in 2019–20
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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