The most common consumer complaint against mortgage brokers relates to inappropriate finance and responsible lending, a new industry report has found.
In the latest
Credit Industry Ombudsman (CIO) Annual Report on Operations, around 360 complaints were received about brokers and aggregators in the 2016/17 financial year. This accounted for 6.1% of the almost 5,900 complaints brought to the CIO in total during this time period.
Breaking down the complaint types for brokers and aggregators, the top five most common issues are as follows:
- Inappropriate finance, including responsible lending (14.9%)
- Failure to act with due skill, care and diligence (11.5%)
- Misrepresentation/misleading conduct (10.9%)
- Complaint about credit provider’s fee or interest rate (9.3%)
- Failure to follow instructions (8.4%)
Other interesting issues included complaints about the brokerage fee (5.0%), fraud (3.0%), unconscionable conduct (2.9%), and complaints about broker’s contract terms (2.3%).
While the CIO didn’t go into detail about the number of member brokers on board with the industry ombudsman, it reported a growing total membership which rose from just under 23,000 in 2015/16 to just over 24,800 in 2016/17.
In the past financial year, the CIO helped return around $180,000 to consumers as refunds or compensation and brought in “significant improvements” to the policies and procedures of financial services providers with regards to responsible lending, financial hardship, disclosure and complaints handling, said CIO ombudsman and CEO Raj Venga.
“As an EDR scheme approved by ASIC and recognised by the Office of the Australian Information Commissioner (OAIC), we are required to investigate any systemic issues or serious misconduct that we identify when dealing with complaints,” he said.
“Over the last 12 months, this important area of our work produced some valuable outcomes, both for consumers and for industry.”
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