fbpx
Skip to main content
Click here for the new Financial Assistance Hub

Labor misleads on customer complaint claims

22 August 2016

Statement from Australian Bankers’ Association Chief Executive Steven Münchenberg:

“The Australian Labor Party has claimed there has been an increase in customer complaints to the Financial Ombudsman Service (FOS) as justification for a royal commission1. Labor’s claims however are based on selective and misleading use of complaints data.

“First, Labor has looked at only one category of complaints, those relating to credit. This obscures the fact that customer complaints to FOS have actually fallen 11% since their peak in 2011-122 . The claim that “the number of people getting ripped off has been going up and up” is inconsistent with the data.

“Second, by using 2008-09 as the baseline, Labor has failed to acknowledge that, in 2010, the national credit law regime came into effect3. Prior to the introduction of the national credit law regime, consumer credit was regulated by the State-based Uniform Consumer Credit Code. With the introduction of the national credit law regime on 1 July 2010, the jurisdiction of FOS expanded considerably and customers were able to take a wider range of complaints about credit to it. This also expanded considerably the number of financial services firms that had to belong to an external dispute resolution scheme. A review of FOS’ terms of reference in the same year further expanded its jurisdiction4. By using 2008-2009 as the baseline, Labor has ignored these developments. 

“Had Labor instead used 2010-2011 as the baseline, after the introduction of these changes, the figures would have looked very different. Between 2010-11 and 2014-15, credit complaints increased by only 13%. In fact, last year complaints about credit were lower than they were in 2011-2012 or 2013-2014.” 

The following table gives the actual complaints received by FOS5.

 2010-20112011-122012-132013-142014-15
Credit complaints14,53718,48516,35816,54416,458

“On any given day, millions of people and businesses will interact with banking products and services. While banks always try to get it right, that doesn’t always happen. The FOS statistics show that customers are exercising their rights and the system is working. The Federal Government is also reviewing FOS to expand it even further. The banks support this. We’re taking action now to improve the way we handle customer complaints. We don’t need yet another inquiry and another report.”


1Leader of the Opposition: “There’s already an ombudsman in place but the number of people getting ripped off has been going up and up”, Australian Financial Review, 21 August 2016; Shadow Financial Services Minister Katy Gallagher “This is one of the reasons why we would argue that we need to have a very systemic look at Australia’s banking system and the financial services system more broadly”, ABC Radio AM, 21 August 2016.
2Minister for Revenue and Financial Services, Labor Missing Key Details, media release, 21 August 2016.
3National Consumer Credit Protection Act 2009 (C’th)
4Financial Ombudsman Scheme, Annual Review, 2010-2011
5Financial Ombudsman Scheme, Annual Review, 2010-2011; Annual Review, 2014-2015.

Latest news

1 / 3
Transcript
Threats and charms: how to avoid scammmers and their tricks
23 September 2021

As more Australians experience financial scams, the ABA has launched a new campaign to raise awareness on the increasing threat of scams, warning Australians to be on the lookout for scam phone calls, texts and emails. FULL TRANSCRIPT: ABA CEO Anna Bligh spoke with ABC Radio’s Ross Marsden. Ross Marsden  The Australian Banking Association has… Read more »

Read more
Media Releases
ABA launches new awareness campaign as scams grow
22 September 2021

“Scammers don’t target one group over another, they target all people of all backgrounds, ages and income levels across Australia.”

Read more
Media Releases
Hardship assistance triples as deferrals continue to rise
15 September 2021

More than 57,000 customers have received hardship assistance during recent lockdowns across Australia.

Read more