The financial ombudsman service (FOS) has released its 2011-2012 annual review of the disputes lodged against finance professionals, including mortgage brokers and loan providers.
The report shows that, in total, FOS accepted 25,298 disputes, up 24% on last year’s figures. Credit issues proved to be by far the most common dispute area with exactly half of all complaints (50%) accepted by FOS concerning credit. Of these, 92% related to consumer credit, including home loans.
FOS says it believes the primary driver of this upsurge in credit disputes is a steep rise in the number of complaints lodged by people and small businesses in financial difficulty, which accounted for 54% of all credit disputes.
“We received 8,659 financial difficulty disputes in 2011/12, up 42% on 2010/11…The continued rise in disputes about financial difficulty suggests that a growing number of Australians are struggling financially.”
They also say that there appears to be an increasing awareness of FOS amongst the general public, which may also help to explain the rise.
Most of the financial difficulty disputes, according to the FOS, related to consumer credit products – particularly home loans, credit cards and personal loans.
“In the 2011/12 year, 40% of the 12,158 consumer credit disputes were about home loans.”
After financial difficulty, FSP decision disputes accounted for the second highest portion of complaints (12%), followed by charges (8%), privacy and confidentiality (7%) and instructions (6%).
Banks were involved in 73% of consumer credit disputes, followed by credit providers (17%) debt collectors (6%) and credit unions and credit reporting agencies (1% each).