Consumer complaints against mortgage and finance brokers decreased over the 2015 financial year, according to the latest figures from the Credit & Investment Ombudsman (CIO).
According to the CIO’s Annual Report, total complaints against financial service providers increased by 7.4% in FY2015, to 4,848. However, total complaints against mortgage brokers and aggregators decreased. Brokers and aggregators accounted for 6.1%, or 294, consumer complaints lodged with the Ombudsman, compared to 6.9%, or 311, in FY2014.
Of the 294 complaints against brokers and aggregators, CIO Ombudsman Raj Venga told Australian Broker 30 complaints were about aggregators and 264 complaints were about brokers. However, he said this was expected.
“Because aggregators are not generally public facing, we don’t receive complaints about them. Rather, we receive complaints about brokers who are credit representatives of aggregators, and these complaints are referred to the aggregators as licensees,” he said.
According to Venga, the most common complaint received about brokers was related to the service provided.
“Complaints are generally about the service provided by the broker. Specifically, consumers rely on the broker’s expertise to arrange a suitable loan for them and make a complaint when they consider that the loan is not in fact suitable for them, the broker did not inform them about certain key features or terms of the loan they arranged, or the broker failed to inform them about other options or features which were available,” he told Australian Broker.
According to the report, residential mortgages were the financial product which received the most complaints, accounting for 19.7% of all complaints.
Debt purchasers and collectors, however, were the financial service provider most complained about. Debt purchasers and collectors received 1,978 consumer complaints, or 40.7% of total complaints. This was followed by residential lenders and mortgage managers, who received 745 complaints and accounted for 15.4% of total complaints. Mortgage brokers and aggregators, at 6.1%, were fifth on the list.
However, according to Venga, mortgage and finance brokers make up the vast majority of CIO’s membership base, at 84%, so it was pleasing to note that brokers accounted for such a small percentage of complaints.
