Small businesses send 3,490 complaints to AFCA in 2021-22

Small businesses in dispute with financial service providers lodged 3,490 complaints with the Australian Financial Complaints Authority (AFCA) in 2021-22, down 3 per cent on the previous year.

Those that succeeded in their complaints secured more than $18 million from financial firms in compensation and refunds.

Small business complaints accounted for about 5 per cent of the more than 72,000 complaints the ombudsman service registered overall last financial year. The remainder came from individual consumers.

About 13 per cent of small business complaints involved financial difficulty, down from 19 per cent the previous financial year, AFCA’s Lead Ombudsman for Small Business, Suanne Russell, said.

“Lower levels of hardship complaints in 2021-22 in part reflect the work the banking sector has been doing in recent years to support customers in difficulty. A further fall in financial difficulty complaints involving small business would be welcomed by everyone, but we are concerned we may see an increase given the end of COVID government support and the current economic environment.

“Higher interest rates may also make that a challenge in the current year but we hope lenders will continue to step up. AFCA will closely monitor the impact of higher rates in complaints from customers in the small business sector.”

Business loans topped the list of most commonly complained about products in 2020-21. Just over 40 per cent of small business complaints – about 1,440 disputes – were to do with loans.

The top 5 most commonly complained about products also included business transaction accounts (800 complaints), commercial property insurance (276) business credit cards (201), and loss-of-profits or business interruption insurance (200).

The top 5 issues were service quality (389), failure to respond to a request for assistance (282), interpretation of product terms and conditions (271), denial of an insurance claim (204) and default listings (198).

AFCA provides an independent and impartial financial complaints resolution service that is free for small businesses and consumers.

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