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The authority has reported that mortgage broker complaints dropped significantly over the 2022 financial year, with service quality issues marginally increasing.
As highlighted by internal data provided to The Adviser by the Australian Financial Complaints Authority (AFCA), during FY22, there were 148 complaints received against mortgage brokers.
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AFCA has said that 172 complaints were closed, and that more than half a million dollars ($588,397) worth of compensation and refunds were issued over last financial year.
Compared to FY21, these figures marked a distinct fall.
According to AFCA’s data, this latest figure of total complaints was 31 per cent smaller than what was reported during FY21 (213).
Further, closed complaints in FY21 (241) were reportedly 29 per cent higher than in the most recent financial year.
Compensation and refunds during FY21 were said to be around $604,100.
Further, complaints resolved in the favour of the complainant were reported as falling by 56 per cent over FY22, dropping from 16 to 7.
Home loans remain key complaint, service quality complaints lift
According to the complaints authority, the top three issues for Australians in regard to mortgage brokers during FY22 was service quality, with AFCA reporting 29 complaints of these over last financial year.
Incorrect fees and costs were also a common issue over the period, scoring 19 complaints, as were misleading products and service information (15 complaints).
Compared to FY21, these results reflect a drop in complaints on incorrect fees and costs complaints but a rise in those regarding service quality.
During FY21, there were 28 service quality complaints, and 29 incorrect fees and costs complaints.
However, the authority also noted that home loans were the most consistently complained about product during FY22 overall, with the figure being almost six times higher than the second-most complained about product.
According to AFCA’s results, there were 83 complaints about home loans during FY22.
By comparison, investment property loans reported the tied second-highest number of complaints with a figure of 14.
Business loans also reported 14 complaints over this period.
The figures reflected a similar trend observed during FY21, with AFCA stating that there were 99 complaints on home loans during this period, as well as 18 complaints regarding investment property loans and 18 complaints towards business loans.
Broker complaints trending downwards over 3 years
As previously reported by The Adviser, separate data released by AFCA suggests that, in recent years, brokers are receiving fewer complaints.
According to the AFCA Datacube – which reports the number of financial firms that have received at least four complaints over a selected period – between 2019 and 2022, the number of referenced brokerages declined in the number of received complaints.
During the final six months of 2021, which is the latest data available on the authority’s data platform, only three broker groups were reported as receiving a collective total of 20 complaints.
One broker group, defined as being “very large” was reported to have received nine complaints over this period, while a “medium” sized group received seven complaints.
By comparison, there were 89 complaints across eight mortgage broker outfits during FY21.
During FY20, AFCA reported that there were 117 received complaints provided to 12 broker groups.
A similar trend was also observed among mortgage aggregators, which saw that, during the latter half of 2021, 32 complaints were listed against four aggregators.
However, from July 2020 to June 2021, this figure was 72 complaints across five aggregators.
[Related: ACCC deputy named to AFCA board]
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