Banking, credit card and insurance disputes drive record AFCA complaints

Preliminary data released by AFCA on Tuesday revealed complaints lodged in 2025-26 have exceeded 100,000 for the third consecutive year. 

The surge was driven by growing financial hardship, rising credit reporting disputes, insurance claim issues and scam complaints. 

Complaints rose across every financial sector, with banking and finance accounting for the largest share at 66,971 complaints, up 23% from the previous year. 

General insurance complaints reached 36,022, while superannuation disputes jumped 42% to 8,755 and investments and advice complaints rose 56% to 6,542.

"These numbers highlight the impact that ongoing cost-of-living challenges and economic uncertainty are having on consumers, and the flow-on effects these conditions can have across the financial system," AFCA chief customer officer Deborah Jenkins said.

Most complained about financial products in Australia

Personal transaction accounts, motor vehicle insurance and credit cards were the most complained about financial products in 2025-26. 

The leading complaint issues were delays in claim handling, poor service quality and claim rejections. 

Insurance remained a major source of frustration, with complaints relating to rejected claims increased 47% over the year. 

Despite the record caseload, AFCA said 43% of complaints were resolved before progressing to its formal decision-making process.

Superannuation members also faced growing challenges, with complaints about delays in claim handling, service issues and rejected insurance claims (up 82%) driving much of the increase. 

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Meanwhile, scam-related complaints rose 12% to 6,706, reversing a decline recorded in the previous year.

"Scammers are becoming more sophisticated in how they target consumers," Ms Jenkins said. "Resolving disputes is important but preventing scams before they happen is even better."

AFCA said complaint volumes in investments and financial advice were heavily influenced by the collapses of the Shield Master Fund and First Guardian, with complaints alleging advisers failed to act in their clients' best interests rising 65% to 2,083.

Under the Corporations Act of 2001, financial advisers have a legal duty to put their clients’ best interest first when providing personal financial advice.

"While most financial advice firms do the right thing, we are seeing a significant number of complaints stem from major financial collapses that have affected thousands of consumers," Ms Jenkins said. 

"These matters are complex and can be incredibly stressful for individuals and their families."

Rising complaints reflect household financial pressure

The complaint surge comes amid the country grappling with still elevated inflation and recent cash rate hikes, which continue to put a strain on household budgets. 

AFCA data revealed financial difficulty complaints increased by 17% over the year, while complaints relating to credit reporting rose 22%.

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"These numbers point to opportunities for firms to strengthen hardship support, improve communication with customers and ensure accurate credit reporting, helping resolve issues before they become disputes," Ms Jenkins said.

As Australia's independent financial ombudsman, AFCA resolves disputes between consumers and financial institutions when an agreement cannot be reached between parties.

"Every complaint represents someone's experience, and collectively they provide a view of where consumers are struggling," Ms Jenkins said.  

"By working with us and acting on these insights, firms can help prevent recurring issues that lead to complaints with AFCA."

Since commencing operations in 2018, AFCA has handled around 690,000 complaints, securing $2.6 billion in compensation and refunds for consumers and small businesses.