Bank branch closures & decline of cash adding to financial hardship woes, AFCA chief David Locke says

The boss of Australia’s financial complaints watchdog says fewer opportunities to access cash and face-to-face banking are adding to hardship woes for consumers. Banking and financial complaints accounted for the lion’s share (54 per cent) of the more than 100,000 complaints fielded by the Australian Financial Complaints Authority in the 12 months to the end of June. The number of complaints was on par with the previous year but almost double the amount six years ago shared by the three predecessor schemes. Of those, 7571 came from WA, with the most complained-about products being personal transaction accounts, consumer credit insurance, credit cards, home loans and personal loans. AFCA was set up in November 2018 as a one-stop shop to resolve complaints from consumers and small businesses against financial firms, replacing the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal. The rulings it makes are binding on the 40,000-plus members of the scheme, which include banks, financial advisers, debt collection agencies, credit representatives, brokers and superannuation trustees. And despite a 17 per cent drop in financial difficulty complaints overall in the 2025 financial year, “failure to respond to a request for assistance” remained in the top five complaint types for the sector. In many cases, lenders are failing to answer pleas for assistance when they are initially contacted by struggling customers, AFCA chief executive and chief ombudsman David Locke said. He also noted more complaints are moving to the formal stages of dispute resolution where AFCA makes a decision binding on the financial firm, suggesting financial hardship issues could benefit from earlier attention and action from firms. Speaking in Perth this week, Mr Locke highlighted regional branch closures were causing concern for consumers and small businesses in rural and remote areas, including among seniors and First Nations people. Aboriginal and Torres Strait Islander people make up about 3 per cent of complainants overall but represent 9 per cent of consumers in financial hardship, according to AFCA’s data. “It is really problematic. Everybody’s been forced to use online banking. The banks are closing so many branches, and then we’re being told cash is dying and the demand for the services is less . . . but for the people who need it, it’s really profound,” Mr Locke said. “So I think access to cash is a really important thing but also access to face-to-face banking is a real problem.” Recent data from the Australian Prudential Regulation Authority showed 1564 bank branches have shut over the past five years as an increasing number of services move online. The major banks have also found themselves in the headlines following actions by the corporate regulator. NAB and its subsidiary Advantedge were recently fined $15.5 million for failing to respond to 345 hardship applications on time, while ANZ is facing a $115m penalty for allegedly failing to respond to 488 customer hardship notices — in some cases for more than two years. Mr Locke said the increasing sophistication of scams through artificial intelligence was also front of mind, adding that banks have an obligation to protect consumers by ensuring their services are secure. AFCA deals with scam cases where consumers have a dispute with their bank about the way they handled the incident. The Federal Government has also indicated AFCA will be the scams ombudsman, after passing legislation in March creating mandatory codes for banks, telecommunications companies and digital platforms to respond to scams. “We see problems with people losing the whole deposit on the house purchase, people losing a whole inheritance,” Mr Locke said. “You see really devastating situations . . . it’s a source of so much human misery. “I implore people to not be embarrassed if they fall for a scam. Report the scam to your bank without delay.” The top issues that West Australians bought to AFCA were: unhappy with the decision made by the financial firm, the service they received, transaction disputes, disclosure of information to a third party or to another area of that firm, and credit reporting. Complaints came from right across the State, with the majority coming from people in Perth. Most complaints were lodged by people between the ages of 30 and 59.