Australians lodged nearly 120,000 complaints with the national financial disputes body last financial year, the highest volume since the scheme launched and the third straight year above 100,000. Banking and finance complaints climbed 23%, driven by borrowers in financial difficulty and credit reporting disputes that spiked 22% in recent months.
The numbers point to sustained cost-of-living pressure flowing through the credit system. Every complaint represents someone who could not resolve an issue directly with their lender or broker, and the categories climbing fastest – financial hardship, credit files, unsuitable loan structures – suggest borrowers are challenging decisions made when rates were lower and buffers looked adequate.
What’s behind the 23% jump
Banking and finance complaints reached 67,000, up from 54,000 the prior year. Financial difficulty cases rose 17%, meaning more borrowers are disputing serviceability assessments, hardship variation denials or foreclosure timelines. Credit reporting complaints jumped 22%, reflecting disputes over defaults, listing errors and requests to pause reporting during hardship periods.
Scam complaints reversed last year’s decline, climbing 12% to 6,700. Investment and advice disputes surged 56%, largely due to two fund collapses, but the broader trend shows borrowers scrutinising advice quality when loans turn unaffordable.
Since 2018, the disputes authority has handled 690,000 complaints and secured $2.6 billion in compensation or refunds. The three most complained-about products were transaction accounts, motor vehicle insurance and credit cards, with service delays and claim rejections the leading issues.
The compliance workload brokers face now
Brokers are navigating a wider compliance footprint at the same time margins are tightening. Recent anti-money laundering obligations for commercial finance brokers add reporting layers to every deal, and the uptick in disputes means more time defending past recommendations rather than writing new business.
Industry bodies are emphasising client-focused advice and due diligence as complaint mitigation tools. The message: communication breakdowns and process gaps drive most disputes, so getting the fundamentals right – adequate income verification, clear disclosure of loan structures, documented conversations about risk – is the most effective defence.
Borrowers who felt informed during the lending process are statistically less likely to lodge formal complaints when financial difficulty hits. That means time spent on upfront explanation and scenario modelling is risk management, not just client service.
What type of disputes are rising
Financial difficulty complaints point to borrowers challenging serviceability calculations made 12 to 24 months ago. Rate rises since mid-2022 have pushed repayments beyond what buffers could absorb, and borrowers are questioning whether the original assessment was adequate or whether hardship options were presented too late.
Credit reporting disputes often stem from borrowers requesting holds on negative listings while negotiating hardship arrangements, or challenging defaults that appeared after a lender rejected a variation request. The 22% jump suggests more borrowers are contesting the mechanics of how distress is recorded, not just the loan itself.
Scam complaints climbed after a one-year dip, reflecting a mix of authorised push payment fraud and disputes over whether banks did enough to prevent transfers. For brokers, the relevance is indirect but real: clients caught in scams often lose deposit funds or equity, then challenge the broker’s role in structuring the original loan.
The practical adjustment for brokers
Three areas matter more in a higher-scrutiny environment. First, document every assumption in the serviceability model – income stability, expense category, buffer adequacy – and explain trade-offs in writing. If a borrower stretches to maximise borrowing power, the file should show you discussed the downside scenario and the borrower acknowledged it.
Second, tighten credit file hygiene. A default or incorrect listing that surfaces during a hardship negotiation gives the borrower grounds to argue the original assessment was flawed. Check credit reports at application, flag anything contested, document it.
Third, communicate early when a borrower signals difficulty. Waiting for formal hardship triggers often narrows the options and increases the chance the borrower perceives the process as adversarial. A proactive call when the first repayment is missed buys time and trust.
If you work with investors, the same principles apply but the stakes are different. Cashflow stress often appears later because rental income masks shortfalls, then surfaces suddenly when a tenant vacates or rates jump at refinance. Mortgage brokers: the back-office build investors rarely see covers the operational gaps that compound risk.
Risks to watch over the next 12 months
Complaint volumes could climb further if unemployment rises or another wave of fixed-rate loans roll onto higher variable rates without adequate buffer. The refinancing cohort from late 2020 and early 2021 – low rates, high LVRs, stretched serviceability – is particularly exposed.
Regulatory scrutiny is also tightening. The anti-money laundering rules introduced for commercial brokers signal a broader compliance direction, and disputes data feeds directly into policy discussions about broker conduct standards. A sustained rise in complaints gives regulators justification to tighten licensing, disclosure or trailing commission structures.
The investor segment carries specific complaint risk. Borrowers who bought off-the-plan or in oversupplied precincts during 2021–22 are now facing settlement shortfalls or rental voids, and some will argue the broker should have flagged supply risk or questioned the valuation. If you wrote investment loans in that window, review the files for documentation gaps now, not when a complaint lands.
What to do next
If you have borrowers showing early stress signals – missed direct debits, requests to extend interest-only periods, questions about hardship options – engage now rather than waiting for formal distress. A proactive conversation documented in the file is evidence of client care if a dispute emerges later.
Review your current serviceability models for buffer adequacy. The 3% assessment buffer still applies, but if your typical client has minimal surplus after the buffer is applied, the risk of complaints rises when rates move another 25 basis points or expenses climb.
For commercial and SMSF brokers navigating the new anti-money laundering requirements, Commercial finance brokers get AUSTRAC pause on AML compliance covers the temporary relief and what happens when it ends.
In plain English: A complaint is not proof of misconduct, but 120,000 disputes in one year means the system is under pressure and brokers are being scrutinised more closely. The borrowers most likely to complain are those who feel they were not told the full story when the loan was written. Tighten documentation, communicate early when difficulty appears, and assume every file will be reviewed under harsher conditions than the day you wrote it.
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General info, not financial advice.
