Complaints against mortgage companies: What you need to know

The responsible lending criteria set by the Australian government means your lender has a responsibility to ensure that a credit product is suitable for you, and to take steps to verify your financial situation before approving your home loan application. But what if you received a home loan you’re now struggling to repay? 

If you’re falling behind on your repayments or facing mortgage stress, you should immediately contact your lender and ask for assistance. From the time you apply for a loan until it’s discharged, your lender is required to answer your queries and address your concerns helpfully and transparently. They’re also required to provide you with assistance if you find yourself struggling under financial stress. 

If your queries are unaddressed, or you’re unhappy with the resolution provided by your lender, your next step may be to make a complaint to the Australian Financial Complaints Authority (AFCA) to have your issue resolved impartially. 

How to file a complaint against a mortgage lender

If you’re unhappy with your home loan or are having issues with your lender that aren’t being appropriately resolved directly, you can file a complaint about your mortgage lender with AFCA. You can even complain about poor customer service and the failure to respond to a request for assistance by the lender. Among the 13,713 complaints regarding home loans with AFCA between 2018-2020, there were 6,337 complaints against financial firms for not meeting responsible lending criteria, 5,889 for failure to respond to a request for assistance and 5,738 regarding customer service quality.

Here’s how you may go about filing mortgage company complaints as per the Australian Securities and Investments Commission (ASIC) website: 

1. Contact your mortgage lender

If you’re unhappy with your lender or suspect something isn’t right, the first step is to call them up to explain the problem and the resolution you’re expecting. If the problem isn’t fixed with a phone call, follow up with a written complaint, precisely mentioning your issue and other details. You can visit your mortgage lender’s website or go through the product disclosure statement (PDS) to find out about the complaint procedure in detail. 

Once the complaint is filed, the mortgage lender should try to resolve it promptly and communicate their final decision about the complaint to you. However, if the response isn’t satisfactory, the next step is to go to the AFCA.

2. Contact AFCA

AFCA is an independent external dispute resolution scheme dealing with consumer and small business complaints against financial firms. You can contact AFCA by:

• Calling on 1800 931 678
• Complaining online at the AFCA website

NOTE: You must connect with your mortgage lender before complaining against them to AFCA. Furthermore, AFCA no longer entertains legacy complaints. You can only file a complaint within six years of becoming aware of or “should reasonably have become aware” of the loss you want to complain about.

If you’ve already complained to your lender, you need to file your complaint against the mortgage lender within two years of getting a response from them.

3. Take legal action

If you aren’t happy with the way AFCA dealt with your complaint, you can raise the issue directly with AFCA and the scheme’s independent assessor (read more on the ASIC website). You also have the option to take your complaint to court after consulting with your own legal counsel.

Generally speaking, most mortgage company complaints are quickly resolved by your lender’s internal dispute resolution team. It’s also possible that you don’t have a specific complaint but feel dissatisfied with your lender’s service or rate. In this case, you have the option of refinancing to another lender with better service standards or a product better suited to your needs. You can connect with a mortgage broker to discuss your situation and explore the available options. 

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