The Australian Financial Complaints Authority (AFCA) has reported a significant 25% rise in complaints from Aboriginal and Torres Strait Islander peoples over the past financial year.
This increase, reaching a total of 3,161 complaints for the 2023-24 financial year, reflects both a heightened engagement with financial products and pressing issues that need immediate attention.
The complaints predominantly centred on unauthorised transactions, delays in insurance claims, and a troubling trend of financial difficulty.
“More First Nations people are engaging with AFCA’s free and fair service for resolving financial complaints,” said AFCA deputy chief ombudsman June Smith.
“Our data shows however a growing need for more effective and culturally appropriate financial services to ensure they can engage in economic and financial activity.”
As complaints escalate, Smith emphasised the need for financial firms to better understand the unique challenges faced by First Nations communities.
“As complaints rise, so does the need for firms to better understand and serve the unique challenges faced by some communities in accessing even basic services that other Australians take for granted,” she said.
With the financial sector increasingly moving online, many First Nations customers are experiencing barriers due to branch and ATM closures, stringent security protocols, and complex identification processes.
AFCA urges financial institutions to rethink their engagement strategies with First Nations customers to provide “genuine, tailored and culturally appropriate assistance,” Smith said.
A notable concern is the 17% increase in complaints related to financial hardship, which now represents one in 10 complaints from First Nations individuals – double the rate seen in the general population.
“It’s deeply concerning to see such high rates of complaints about the failure to respond to requests for assistance for First Nations people in financial difficulty,” Smith said. “This is an area where firms must meet their legal obligations.”
There has also been a 47% surge in complaints regarding comprehensive motor vehicle insurance claims and a 24% increase in complaints about delays in insurance claim processing.
“These figures point to serious challenges faced by First Nations customers in accessing fair and timely insurance services,” Smith said.
First Nations peoples are facing additional hurdles in accessing their superannuation, largely due to inadequate identification processes that fail to accommodate cultural practices and language barriers.
Smith has urged superannuation funds to revise their processes to be more inclusive.
In response to these challenges, AFCA is enhancing its complaint management approach to be culturally informed and accessible, guided by its Reconciliation Action Plans.
“We understand that engaging with the AFCA complaint process can be stressful, especially for those facing financial or personal challenges,” Smith said. “That’s why AFCA provides additional support where needed, including offering flexibility in service delivery and timeframes and allowing people to appoint representatives.”
AFCA’s call to action highlights the critical need for the financial industry to evolve in its approach, ensuring equitable access and support for First Nations peoples.
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