AFCA received 2461 complaints from Aboriginal and Torres Strait Islander peoples in the 2024–25 financial year
The issues behind the complaints have been raised repeatedly over the years, but the industry is yet to enact meaningful reforms
The advocacy group Mob Strong is calling on both banks and non-bank lenders to better serve First Nations customers
When it comes to serving the needs of Australia’s original inhabitants, the Australian Financial Complaints Authority (AFCA) wants banks and other financial services to do better.
Despite attempts by First Nations advocates to get financial firms to anticipate the challenges, First Nations communities still receive the same poor service and the industry remains tone deaf to cultural differences that have repeatedly been brought to its attention.
AFCA received 2461 complaints from Aboriginal and Torres Strait Islander peoples in the 2024–25 financial year. The complaints were mostly about unauthorised transactions, a lack of financial hardship assistance, poor or no response to complaints, and the mis‑selling of funeral and other insurance products.
But this number reflects only a fraction of the poor experiences of First Nations customers, as many get nowhere when trying to access financial services in the first place, let alone resolve an issue with their financial services provider.
“Year after year the same patterns persist, and many people never reach external dispute resolution because of the frustration they experience dealing with firms,” says AFCA deputy chief ombudsman Dr June Smith.
“First Nations people continue to face disproportionate challenges and barriers when interacting with financial services and our data likely reflects only a fraction of the problem,” says Smith.
First Nations people continue to face disproportionate challenges and barriers when interacting with financial services and our data likely reflects only a fraction of the problem
AFCA deputy chief ombudsman Dr June Smith
Part of that problem starts with the failure of banks to recognise the living conditions of remote First Nations communities, and this lack of recognition has a long history.
In April last year, we reported on Westpac abruptly closing its last branch in Tennant Creek in the Northern Territory, leaving many First Nations and Torres Strait Islander peoples with very limited banking services.
Through his work with the advocacy group Mob Strong, acting director Hark Holden sees the problem firsthand on a daily basis.
“These financial service providers need to ascertain and accommodate the vulnerabilities of these clients rather than just waiting for them to get in touch,” Holden says. “They must also look into their own past history of not helping these clients out when help was needed.”
A gap for BNPL and payday lenders to exploit
Holden agrees with Smith’s view that only a small portion of dissatisfied First Nations clients manage to lodge a complaint with AFCA.
“Not that many First Nations consumers are aware of their right to complain to the financial service provider, or to escalate that complaint to AFCA if necessary. Many are actually first or second generation users of the financial system, after generations of marginalisation and dispossession,” Holden says.
This unfamiliarity, combined with a lack of access to financial services, is one of the reasons that many First Nations customers fall into the hands of third-tier operators such as payday lenders or buy now, pay later businesses.
“They feel like they have no agency over accepting these products and could agree to disadvantageous contractual terms without understanding them in the first place,” Holden says. “And they feel like they cannot complain as they have no other source of credit.”
Digital exclusion
As financial service providers close down bank branches and force clients to transact online, First Nations communities are further isolated. It is well established that many First Nations people don’t have digital access, either because they can’t afford it or it isn’t available – sometimes both.
When dispute resolution processes are fully automated and devoid of human touchpoints, many First Nations clients have nowhere to turn.
Not having digital access has many impacts, including not being able to make insurance claims, access superannuation accounts, or receive critical communications.
“A priority for ACFA is equity of access for everyone,” says Smith.
“When we go to some remote communities, the internet is so sporadic you can only get a clear connection in a small part of the community,” says Mob Strong’s Mark Holden.
“The number of financial service providers are limited, and there are no bricks-and-mortar branches for people to come in and resolve the issue face to face. They would have to either take a very long four-wheel-drive drive journey or take a flight to go to a bank branch.”
“Our clients often feel very hopeless when trying to sort out a dispute with a financial service provider, and sometimes they feel like they want to give up,” says Holden. “It requires financial counsellors and lawyers to help make these cases, but these resources are severely limited.”
Better codes of practice needed
According to AFCA, a number of codes of practice are under independent review in the financial services sector. Smith says this presents an opportunity to set new standards for banks and other lenders interacting with First Nations communities, such as how they account for cultural differences and technological limitations when asking customers to provide proof of identification.
“Now is the time for industry to clearly define its commitment to improving engagement with First Nations peoples,” Smith says.
These codes need to be enforceable and bind the entire industry
Mob Strong acting director Mark Holden
Smith says the codes should be updated to make it easier for First Nations customers to self-identify for security purposes and that “meaningful cultural awareness training” should be a requirement for both banks and non-bank lenders so they can provide support that meets the needs of First Nations people in regional and remote areas.
“A lot of First Nations consumers can’t understand the security requirements, such as providing digital ID or multi-factor identification, and so they get left out,” Holden says.
But codes of practice only go so far.
“These codes need to be enforceable and bind the entire industry, not just a section of it. If a code’s not working, the alternative is law reform or the imposition of legislative requirements,” says Holden.
It’s a point that First Nations advocates have been making for a long time. In the absence of enforceable laws that dictate how banks treat First Nations customers, Holden says some genuine care and concern can go a long way.
“What these financial services providers really need to do is be more proactive in trying to assess and accommodate vulnerabilities. They need to have specialised training and specialised staff for First Nations or other vulnerable consumers. It would be an unfair burden on these consumers to deal with the industry without these things in place.”
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
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