Trending Financial News 16 July
Banks told: Get on top of fraud
Banks and other financial institutions have been told firmly by the banking industry ombudsman to do more to fight fraudsters. The number of complaints relating to fraudulent transactions is increasing and the ombudsman service, the Australian Financial Complaints Authority, has issued a directive to the industry.
“The high number of unauthorised transaction complaints shows financial firms need to do more to ensure they have appropriate systems in place to detect fraudulent transactions.”
Other issues highlighted in the half yearly ombudsman report include delays in insurance claims handling, incorrect fees and costs and denial of claims.
Complaints against banks skyrocket
The Australian Financial Complaints Authority received 35,000 complaints from bank and financial institution customers in six months, up 35 per cent compared with same period one year before. AFCA expects to receive 80,000 complaints in the full year.
Bank customers won $83 million in settlements by using the ombudsman service to deal with their complaint. 74 per cent of complaints were resolved in favour of the customer or by agreement.
Credit cards accounted for the largest number of complaints to AFCA, followed by home loans, personal loans, comprehensive car insurance and personal everyday transaction banking accounts.
Record numbers of Aussies complain about their credit report
The banking industry ombudsman, the Australian Financial Complaints Authority reported that the number one issue complained about, across all types of banking products, loans and accounts is credit reporting.
2,286 people complained about their consumer credit profile and the decisions banks and lenders made on the basis of the information in their credit report.
2,127 people complained about unauthorised transactions.
1,982 people complained about delays in claim handling.
1,816 people complained about incorrect fees or costs
1,792 people complained about a claim that had been denied by their insurer or bank.
Cryptocurrencies still falling, one week after Trump
Bitcoin has lost 13 per cent or $2,363 in a week although prices are showing signs of stabilising after four days of steep falls.
US President Trump sent cryptocurrency markets crashing last Thursday with a viral Twitter tirade branding Libra and Bitcoin “not money” and insisting there is only “one real currency” in the US, the US dollar.
Bitcoin is currently trading at $15,468, down from its high last week of $18,818.
Ethereum is down 27 per cent to $302 from its high last week of $450.
“I am not a fan of Bitcoin and other Cryptocurrencies,” tweeted the President, “which are not money, and whose value is highly volatile and based on thin air.”
Westpac eases home loan serviceability rate
Westpac has amended its residential lending policy, effective today, to lower the bank's home loan serviceability floor rate from 7.25 per cent to 5.75 per cent. Westpac will apply an additional 2.50 per cent to the actual home loan rate to measure a loan applicant’s ability to repay their loan if rates rise. The minimum serviceability rate will be 5.75 per cent.
ANZ changed its floor rate to 5.50 per cent last week with a buffer rate of 2.50 per cent.
Most first home buyers miss out on Morrison’s 5% FHB scheme
Prime Minister Scott Morrison’s key election commitment of a new first home buyer scheme that supports people who have just a five per cent deposit will not benefit the vast majority of people looking to buy their first home, new analysis from the Reserve Banks shows.
Mr Morrison committed $500m to a new scheme to guarantee loans for 10,000 eligible first home buyers with only a five per cent deposit and income up to $125,000 (for singles) or $200,000 (for couples).
Analyst Cameron Kusher from CoreLogic said: “Over the past 10 years there has been an average of 103,485 first home buyer finance commitments per annum.
“Only around 10 per cent of first home buyers will be able to access this scheme.”
Internal RBA emails released under Freedom of Information laws last week showed that the scheme was unlikely to find 10,000 eligible borrowers because of its eligibility limitations and thresholds.