11,000 COVID-19 complaints, scams on the rise

The Australian Financial Complaints Authority (AFCA) has revealed that it is seeing a sharp rise in consumer complaints about scams, after receiving more than 11,000 complaints related to COVID-19 in the year leading up to the anniversary of the pandemic’s declaration.

The COVID-19 complaint numbers were released along with AFCA’s latest half-year statistics, which showed a 23 per cent jump in the monthly average of complaints about unauthorised transactions and scams in the six months to December 31.

The World Health Organization (WHO) declared COVID-19 a pandemic on March 11 2020 (March 12 AEDT) but AFCA had begun collecting data on COVID-19 complaints a week earlier. AFCA’s data shows that between March 3 last year and February 28 this year there were 11,482 COVID-related complaints about financial products or services. That was 15 per cent – or one in seven – of all complaints over that March-February period.

“While not seeking to downplay the challenges people have faced, and continue to face, this was fewer complaints than we thought might arise from the pandemic,” AFCA’s Chief Operating Officer Justin Untersteiner said. “Banks were quick to respond, providing emergency support as they handled unprecedented numbers of requests for repayment deferrals. Superannuation funds worked with us to resolve consumer concerns about early access to super funds. Government financial support measures also played a vital role.”

However, as some of the government support is wound back it’s important that consumers and financial service providers work together to resolve issues quickly as they emerge in the coming months, Untersteiner said.

The bulk of COVID-related complaints (65 per cent) came through in the first six months from March last year, as consumers and firms came to grips with its impacts. There was then a trend downwards as financial firms fine-tuned their responses, activities like travel reduced and the economy steadied.

In the separate statistics for the second half of 2020, the monthly average for complaints in relation to financial difficulty fell about 35 per cent and complaints involving the major banks were down.

“As the government support introduced during COVID starts to wind down, we are on alert for issues – particularly around financial difficulty – emerging in the coming months. It’s vital that consumers and financial service providers work together to resolve issues quickly. If you find yourself in trouble, I strongly urge you to contact your financial service provider to try to sort it out to avoid a problem becoming bigger,” Untersteiner said. The JobKeeper wage subsidy phases out on March 28.

It’s not just the volume of complaints about scams that’s increasing but also the sums involved. Some complaints involved scammed amounts topping $1 million. “Scams were growing before COVID-19 but the pandemic has accelerated this trend,” Untersteiner said. “People should check in with family and friends – especially those who may be more vulnerable – and discuss the dangers.”

Overall, in 2020 AFCA received 77,739 complaints, up 5 per cent on the number in 2019. Resolved disputes resulted in compensation and refunds totalling $294 million going to consumers and small businesses.

Source: AFCA   

*COVID-19 complaint data from 3 March 2020 to 28 February 2021