Brokers only a tiny proportion of COSL complaints

by Adam Smith28 Oct 2014
Brokers formed only a small portion of the complaints directed to COSL last year by consumers, a new report has revealed.

The Credit Ombudsman Service has released its Annual Report on Operations, and brokers form only a small proportion of the total complaints received by the service. While 90% of complaints received by COSL related to consumer finance, only 6.9% were about finance brokers. By comparison, residential non-bank lenders and mortgage managers accounted for 17.1 complaints while debt purchasers and collectors were the most common source of complaints at 43.3%. ADIs accounted for only 2.2% of complaints.

Of the brokers who were the source of consumer complaints, 23.5% were accused of failing to act with due skill, care and diligence, while 14.7% were accused of inappropriate finance, including responsible lending. Only 5% were accused of outright fraud.

COSL saw its overall number of complaints rise by 20% from the previous year. Credit Ombudsman Raj Venga said the service handled the influx well.

"This year, we received 4,513 complaints, or a  20% increase from the previous year. Despite this, I’m pleased to say that we have closed 40% more complaints this year than the last, with 57% of complaints resolved within three months and 76% within six months," Venga said.


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COMMENTS

  • by Bottom Line 28/10/2014 10:43:20 AM

    Yet my annual cost of being a member went up by $100?

  • by Marko 28/10/2014 11:46:43 AM

    This is quite misleading as it is not comparing apples to apples.
    If you break down the numbers and eliminate those complaints that are not related to the origination of the loan (because brokers do not usually play a significant part in the management of the loan) then you will see a different story.
    Most of the complaints that I see about the origination of the loan relate to the actions or inactions of the broker not the lender.
    When a borrower is in trouble on their loan they will generally complain to COSL about the lender not the broker, because it is the lender that has the deepest pockets, and that complaint will see all action against the borrower put on hold.