The Australian Financial Complaints Authority (AFCA) has published its annual review of grievances received from Aussie investors between July 1, 2020, to June 30, 2021. It has received 3,888 complaints related to investment and advice services, which is 6 percent of the total complaints received.
As per the agency’s figures, 748 complaints were received against financial firms, whereas 572 and 469 complaints were against foreign exchange dealers and derivatives dealers, respectively.
Shares, forex and contracts for differences (CFDs) were the most complained about products receiving 950, 431 and 417 complaints, respectively.
“While we have seen an increased number of cryptocurrency disputes from previous years, the number is still a small proportion of investments and advice disputes,” AFCA stated.
Most of the complaints against cryptocurrencies were around the loss of funds due to transfers from wallet providers to unregulated third parties, wallet providers not clearly disclosing the real costs of conversion from one cryptocurrency to another, and consumers being confused about whether they are investing in a cryptocurrency or a derivative.
The agency has already closed 3,465 investments and advice complaints by the end of the financial year. 33 percent of the closed complaints were resolved at the registration and referral level and 27 percent at case management, while only 13 percent of the complaints proceeded for decisions.
The agency further highlighted that half of the complaints were resolved and closed within 90 days, however, the average resolution time clocked at 114 days.
“AFCA has a significant number of investments and advice complaints that are paused, pending legislation to establish a Compensation Scheme of Last Resort. This is due to the insolvency of the financial firm and/or the failure to pay compensation in accordance with an AFCA determination,” the agency stated.
Meanwhile, the Belgian financial markets regulator, FSMA, recently disclosed that 1,087 questions and reports by consumers concerning fraud and unlawful offers of financial products and services in the first half of 2021, which was a 60 percent yearly rise.
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