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New figures help to explain why brokers are now the dominant force in the mortgage market, with consumer complaints at levels of which most other industries would be envious.
While ASIC oversees serious allegations of fraud and corporate misgovernance, it refers complaints about everyday service and experience to the Financial Ombudsman Service Australia (FOS) and the Credit & Investments Ombudsman (CIO). Complaints are also received by both of the industry’s leading associations, the MFAA and FBAA.
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However complaints lodged by consumers about brokers number in the hundreds – a drop in the ocean compared to the volume of mortgage applications lodged each year by brokers around the country.
In 2013-14 – the latest year for which data is currently available – just 100 complaints were received about mortgage brokers and a further 130 about finance brokers. The majority for both related to financial difficulty, the lender’s decision and instructions.
Last financial year saw complaints against brokers and aggregators actually fall with the CIO, both in terms of volume and as a proportion of those lodged against all credit-related industries.
It recorded 294 objections against the industry. Inappropriate finance, including responsible lending, accounted for 11.4 per cent of those grievances, followed by failure to act with due skill, care and diligence (10.6 per cent) and poor customer service (6.4 per cent).
MFAA chief executive Siobhan Hayden said that out of more than 11,000 loan writer members the MFAA recorded only 125 complaints lodged in a period of 12 months.
For the FBAA, the figure is even smaller still.
“We would normally not see more than six a year, and most of those are readily resolved without higher progression,” said Peter White, the association’s chief executive.
Despite the small volume of criticisms, Mr White said they present “a great learning tool to ensure you have the opportunity to correct these things”.
“We have to remember we are all human and from time to time we all make mistakes, and this is one of the tools to learn by. But deal with things earlier not later, they resolve better and quicker that way.”
