Complaints about banks, lenders and insurers

If you have borrowed money from a bank or other lender, or taken out an insurance policy, you could end up in a dispute with the credit provider or insurer. It is important to know how to go about resolving your dispute and where you may be able to get help.

Many complaints about financial services and products can be fixed quickly if you contact the service provider directly. Most have an internal dispute resolution process that explains how you can make a complaint. The process will also set out a time frame for responding to your complaint.

If contacting the bank, credit provider or insurer directly does not resolve the issue, you may be able to take your complaint to the Australian Financial Complaints Authority (AFCA). If it is not resolved there, you may be able to go to court. You should get legal advice before going to court. 

Call the Infoline or contact your nearest Legal Aid WA office to find out what help we can give for your situation. If we can’t help, we may be able to refer you to someone else who can.

There is information below on time limits to respond to complaints, what AFCA can do, and hints to avoid disputes.

How long does the bank or insurer have to respond to my complaint?

Their complaints or internal dispute resolution policy will set out how long the bank, lender or insurer has to respond to your issue.

Once they have received your complaint or request for an internal review, they must respond within 30 days. If the issue relates to a claim for financial hardship, the response must be made within 21 days (unless you have been asked to provide additional information). A response must be provided within 28 days if you don’t provide the additional information, or otherwise within 21 days of receiving the additional information.

What if my complaint can’t be resolved internally? 

If you are unhappy with the response you receive from the internal review (or you do not receive a response within the set time frame), you may wish to lodge a complaint with AFCA.

AFCA provides free dispute resolution for consumers (and some small businesses) who are unable to directly resolve a dispute with their financial services provider (sometimes called ‘financial firm’).

Dispute resolution is a process aimed at resolving disputes between parties without going to court.

Banks and other credit providers, financial planning firms, general insurers, insurance broking firms, and life insurers are organisations required by law to be AFCA members.

If you choose to accept an AFCA decision in your favour (sometimes called ‘determination’), the decision must be followed by the financial services provider. Otherwise, if you don’t accept the decision, or your lender is not a member of AFCA, you may be able to try other ways to resolve your dispute such as going to court.

What if AFCA awards compensation and the financial services provider does not pay up?

If you have experienced financial misconduct that has caused loss, you may be eligible to claim with the Compensation Scheme of Last Resort (CSLR). You can only do this after:

  1. you have experienced financial misconduct on a product or service covered by the CSLR (only certain financial products and services are covered)
  2. you completed the AFCA complaint process and were awarded compensation, and
  3. the financial services provider did not pay the compensation. You must also have let AFCA know.

The CSLR can only review a claim after your complaint has been investigated by AFCA.

For information on eligibility to claim including which products and services are covered, visit the CSLR website.

Hints to avoid disputes

A common complaint about banking and financial products (including insurance policies) is that consumers do not know exactly what they are signing up for. It is important to take time to 'read the fine print' and ask for more information if you are not sure about something. There can sometimes be 'cooling-off periods' where you can withdraw from the contract, but not everything comes with this option.

Make sure you:

  • know the fees, interest rates and charges that apply for services when you open a bank account, sign up for a credit card, or take out a loan
  • have a full understanding of the terms and conditions of your accounts and loans, and
  • read your insurance policy to see what things the policy covers, what exclusions or restrictions apply, and how claims are processed to check that it meets all of your needs.

More information

         

Reviewed: 22 April 2024

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Disclaimer

The information displayed on this page is provided for information purposes only and does not constitute legal advice. If you have a legal problem, you should see a lawyer. Legal Aid Western Australia aims to provide information that is accurate, however does not accept responsibility for any errors or omissions in the information provided on this page or incorporated into it by reference.