Scams on the rise as financial complaints balloon

“Hi Mum, just letting you know, my phone broke.”

That was the seemingly innocuous message from Nina Merrilees’ daughter, who was travelling overseas.

“I thought it was standard for her,” Ms Merrilees told AAP.

“She would lose a phone or have her phone stolen or drop it down the toilet. It wasn’t unusual.”

Neither was she fazed after a second text 10 minutes later, asking her to transfer money to a bank account because a banking app hadn’t been set up on the new phone.

Her daughter was purchasing a puppy that weekend and the Victorian mum believed that’s what the funds were for.

She transferred more than $11,000 in three instalments.

“After the third payment I thought, ‘gee, that’s an expensive dog’,” she said.

The penny dropped the next day, when her daughter called after Ms Merrilees emailed her about the transfers.

“I felt sick, so embarrassed and just the turmoil of having to continually chase people up,” she said.

Ms Merrilees was told her money had been transferred to two separate accounts with another bank, who she found to be blatantly rude and without empathy even after she reported them to the financial complaints authority.

“They basically said, ‘You’re not our customer. We can’t help you’,” she said.

It’s been a year since her ordeal and Ms Merrilees hasn’t recouped her losses. Her own bank compensated her $3000 but she has made it her mission to raise awareness so others don’t fall for the same tricks.

Australians lodged almost 97,000 cases with the Australian Financial Complaints Authority in 2022-23 over disputes with financial organisations, a bump of 34 per cent over the past 12 months.

Chief ombudsman David Locke is concerned over the volume and says it reflects growing financial stress in the community.

“It’s not fair on consumers and not good for business,” he said on Thursday.

For the first time since AFCA’s inception five years ago, personal transaction accounts overtook credit cards as the most complained of product, partly because of scam-related disputes.

Financial Rights Legal Centre director of casework Alexandra Kelly said banks passed the buck, victim-blamed and essentially threw up their hands claiming there is little they can do after the fact.

Banking and finance complaints rose by more than a quarter to almost 54,000, with people facing more pressure with home loans and credit card debts.

Insurance handling delays were high on the list of customer complaints, up 76 per cent.

There was a significant spike in insurance delays relating to superannuation, including payment of death benefits, which more than doubled.

Australians were able to secure more than $250 million in compensation and refunds after complaining to the authority.

It was able to close more than 86,000 matters and took an average of 69 days to resolve them.

NSW customers lodged most complaints nationwide, almost 30,000 of them, and the fastest growing group of complainants was registered in the ACT, with a more than 60 per cent increase in grievances.