Updated: 29 April 2024

The Australian Financial Complaints Authority (AFCA) is concerned by a rise in complaints involving financial difficulty, especially lenders’ handling of customer requests for hardship assistance.

Complaints involving financial difficulty, a category that includes disputes over hardship assistance, rose 25 per cent in 2023, the financial sector ombudsman service reported today. Of the 5,396 complaints, a third related to home loans.

“We are concerned about the increase in complaints about financial hardship and about the practices of some lenders,” AFCA’s Chief Ombudsman and Chief Executive Officer, David Locke, said. “We urge all lenders to identify hardship early and to ensure they provide genuine consideration to a customer's request for hardship assistance.”

Given the challenging economic environment, AFCA was not surprised by the increase in consumers seeking hardship assistance, Mr Locke said. “Lenders were preparing for this too and we acknowledge the investments some have made in specialist hardship teams and better processes. But the rise in complaints tells us there is still work to do.”

He said it was concerning that more than half of financial difficulty complaints to AFCA in 2023 were about a lender’s failure to respond to, or the quality of the response to, a request for hardship assistance. This is particularly pronounced for smaller lenders and Buy Now Pay Later (BNPL) providers.

AFCA was also seeing complaints where lenders had provided a standardised, or “cookie cutter”, response that did not consider the customer’s individual circumstances. “Care needs to be taken with automated processes,” he added. “Lenders are required to give genuine consideration to hardship requests.”

Under the National Credit Code and the Banking Code of Practice, banks are required to work with customers to find a sustainable solution to financial hardship, and to do that by considering their individual circumstances.

AFCA’s Lead Ombudsman, Banking and Finance, Natalie Cameron, said other issues AFCA was seeing included lenders issuing default notices to consumers who had agreed to repayment arrangements, lenders placing unnecessary barriers to financial counsellors assisting consumers, and debt recovery action being taken while a matter is still before AFCA, which is not permitted. 

Ms Cameron said all lenders should ensure they provide appropriate assistance to people experiencing vulnerability. “Vulnerable complainants are not always identified or given the care required,” she said. “Sometimes they are simply not in a position to navigate the process and provide the required information in the requested format.”

The Australian Securities and Investments Commission (ASIC) has been undertaking a review of hardship applications and wrote to lenders last year calling on them to make sure they supported customers appropriately.

What to do

AFCA’s Lead Ombudsman, Banking and Finance, Natalie Cameron, says borrowers should contact their lender to request hardship assistance as soon as possible if they are starting to find themselves in financial difficulty.

“Don’t wait until overdue repayments and arrears are already accumulating. Act quickly so as many options as possible remain open to you,” she says. “We’d also encourage people to seek help from a free financial counsellor sooner rather than later.”

“Borrowers who are not happy with the response to a hardship request can make an internal complaint to their lender to have the decision reviewed. The bank generally has 30 days to respond to a complaint.

“If they remain unhappy after the complaint has been considered by the lender, or the complaint hasn’t been considered in time, they can access AFCA’s free and impartial dispute resolution service.”

Updated: 29 April 2024

Media enquiries media@afca.org.au

About AFCA

The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent dispute resolution to individual consumers and small businesses when they are not able to resolve complaints directly with financial firms in banking and finance, insurance, investments and advice, and superannuation. AFCA aims to help the parties reach agreement, but it can issue decisions that are binding on financial firms.

Sorry, we’re currently offline.

Would you like to end your chat with AFCA?

Please bear in mind that your conversation will not be saved.

AFCA chat service terms and conditions

Welcome to our live chat help service.

Please be advised we cannot provide you with financial or legal advice. However, we may be able to refer you to a community legal centre or financial counselling service if you need help.

Our live chat is operated by Genesys Cloud on behalf of AFCA. Any personal information provided in this chat will be captured by both organisations in accordance with their privacy policies, available at www.afca.org.au/privacy and www.genesys.com/company/legal/privacy-policy


We provide consumers and small businesses with fair, free and independent dispute resolution for financial complaints.

Please enter your details to start your chat with an AFCA representative.

Please enter your name
Please enter a valid email address
Please enter a valid phone number

We provide consumers and small businesses with fair, free and independent dispute resolution for financial complaints.

Welcome to our live chat help service.

An agent should be with you shortly.