Credit card problem? Here are 10 million reasons to complain
Do you have a problem with your credit card? There are around 10 million reasons to complain.
This is the dollar amount Australians received in compensation in 2020-2021 after complaining about their credit cards to the Australian Financial Complaints Authority.
New data from AFCA released on Monday revealed that around 10,000 credit card complaints were filed in the year through July, making it the biggest source of financial problems with companies financial covered by the mediator.
In total, more than 70,000 complaints regarding various products were filed with the AFCA, with $ 240 million in compensation and reimbursement granted during the year.
Credit card complaints have gained the upper hand amid a worrying increase in the number of unauthorized transactions reported, AFCA chief David Locke said.
âConsumers have identified charges on their credit cards that they have not consented to and they don’t know how it happened,â Locke said. The New Daily.
“Much of it will be scam activity.”
Australians have abandoned credit cards en masse during the pandemic, but that hasn’t stopped thousands of complaints against the banks.
According to AFCA data, customers filed about 3,740 other lender-related complaints listing credit defaults on their accounts, and about 1,890 complaints about incorrect fees and costs.
Although credit products attracted about 40 percent of all AFCA complaints, 24 percent were for insurance products and 12 percent for deposits.
In total, 70 percent of complaints are resolved through AFCA mediation.
âWe suspect some of these [credit default complaints] these are the people who apply for home loans, check their credit scores and challenge their payment history, âLocke said.
Worryingly, 2,678 complaints were filed by credit card holders who sent hardship requests during COVID-19 but were not responded to.
âWe have certainly seen problems with financial institutions not responding to hardship requests,â Mr. Locke said.
“Overall, banks have deferred a lot of loans, but credit cards aren’t always with the big banks.”
The rise in credit card complaints comes amid growing anger over the high interest rates charged on cards by major banks, even as borrowing costs plummeted during COVID-19.
Credit card interest rates are around 14% on average across the industry, which consumer advocates have called a massive scam.
In recent months, major bank bosses have also faced a discussion over their credit card rates in hearings before the House Economics Committee, with Labor MP Andrew Leigh asking why consumers are paying so much.
In April, Dr Leigh accused ANZ of entering payday lending territory after it was reported that the bank announced a 20.4% interest rate on one of its cards. credit.
ANZ CEO Shayne Elliott and other bank bosses grilled over their cards have defended their prices, saying the cards are not meant to be used for long-term debt.
âThere are much higher rates in consumer credit and small business loans that start with a three and a four in front of them,â Elliott said in April.
In the 12 months leading up to July 1, 26,281 complaints were filed with AFCA regarding banks, while 13,896 concerned insurance companies.