Financial ombudsman warns against insurance middlemen

The Australian Financial Complaints Authority (AFCA) has warned people affected by recent natural disasters, against signing up with insurance middlemen in the hope of progressing their claims.

AFCA Chief Operating Officer Justin Untersteiner said, “AFCA is an ombudsman service that is completely free to use and legally binding on financial firms”.

Mr Untersteiner encouraged people to think twice before signing contracts with claims management companies.

“AFCA has heard reports of claims management companies charging people to manage disputes with financial firms” Mr Untersteiner said.

“While not illegal, AFCA is concerned that people are being charged excessive costs and/or a percentage of the sum recovered, when in reality the service provided is of no real benefit to the person.

“AFCA warns against signing binding contracts with claims management companies unless people clearly understand the likely cost implications. In most cases it is not necessary or of any real value.”

AFCA has also just launched a support hotline to ensure priority service for those impacted by the devastating Australian bushfires. AFCA was ready and willing to assist to ensure financial complaints are resolved quickly.

The AFCA Bushfire Support Line (1800 337 444) is part of AFCA’s disaster response process which identifies and expedites complaints about financial products and services from the impacted communities.

“If you’re affected by the bushfires, and you find yourself in a dispute with your insurer or financial provider about a claim or request for assistance, AFCA can help resolve it. We have special processes that identify and fast-track complaints from people, primary producers and small businesses in impacted communities, so we can assist you to resolve complaints as quickly as possible” Mr Untersteiner said.

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