When things go wrong with your bank, insurer, or energy provider, you might be told to “take it up with the Ombudsman.” But what does that actually mean in Australia in 2025? The ombudsman system remains one of the most powerful (and sometimes misunderstood) resources for consumers facing unresolved complaints. Here’s how it works, the types you’ll encounter, and what to expect—warts and all.
What Is an Ombudsman and How Do They Help?
An ombudsman is an independent official or office designed to investigate and resolve complaints between consumers and organisations, particularly in industries like finance, telecommunications, and utilities. Ombudsmen aren’t judges, but they do have the power to review disputes and make recommendations or binding decisions, depending on the sector.
In Australia, ombudsmen are typically free to access, impartial, and operate outside the court system. Their main aim? To help everyday Australians get fair outcomes without needing to lawyer up or spend months in small claims court.
- Accessible: Most ombudsman services are designed for the average person, with plain-English processes and minimal paperwork.
- Impartial: Ombudsmen don’t take sides—they look at the facts and industry codes before making decisions.
- Authority: Depending on the ombudsman scheme, they may be able to enforce decisions or simply recommend solutions.
The Main Types of Ombudsman in Australia (2025 Update)
Australia’s ombudsman system is sector-based, meaning there are different ombudsmen for different industries. In 2025, the most relevant for consumers include:
- Australian Financial Complaints Authority (AFCA): Handles complaints about banks, insurers, super funds, and financial services. With recent 2025 reforms, AFCA’s compensation caps have increased, and its jurisdiction now covers some fintech disputes.
- Energy & Water Ombudsman: Every state and territory has its own scheme to resolve disputes about electricity, gas, and water providers. In 2025, some have broadened their remit to include embedded networks in apartment complexes and solar energy disputes.
- Telecommunications Industry Ombudsman (TIO): Resolves complaints about phone and internet services. With the NBN rollout completed and 5G expansion, the TIO now also covers disputes about digital connectivity and regional blackspots.
- Commonwealth Ombudsman: Oversees complaints about federal government departments and agencies, including Centrelink and immigration.
- State Ombudsmen: Handle complaints about state or local government services, such as public housing, police, or education departments.
It’s worth noting that not every dispute qualifies—ombudsmen usually require you to try resolving the issue with the business first.
Pros and Cons of Using an Ombudsman in 2025
While ombudsmen offer a lifeline for consumers, their process isn’t always perfect. Here’s what to weigh up before lodging a complaint:
Pros
- Free and Accessible: There are no fees for consumers, and support is available for those with English as a second language or accessibility needs.
- No Legal Jargon: Designed to be user-friendly, with clear instructions and minimal legalese.
- Timely Outcomes: Most ombudsman schemes aim to resolve complaints in a matter of weeks, not months. In 2025, AFCA introduced a streamlined track for simple banking disputes under $5,000.
- Binding Decisions (Sometimes): For financial and energy complaints, ombudsman decisions can be binding on the company (though consumers can still pursue court action if unsatisfied).
- Systemic Impact: Ombudsmen don’t just resolve individual complaints—they can also recommend systemic fixes if they spot widespread issues (such as recurring telecom billing errors in 2025).
Cons
- Limited Jurisdiction: Not all disputes are covered. For example, the AFCA can’t deal with business-to-business lending above $5 million, and the TIO won’t review complaints about device manufacturers.
- Enforcement Gaps: Some decisions are only recommendations—especially in government or local council disputes—meaning agencies might ignore them.
- Process Can Be Slow: While most cases are resolved quickly, complex disputes can drag out for months, especially if further evidence is needed.
- Compensation Caps: There are limits on how much compensation you can be awarded (e.g., AFCA’s cap is $1.15 million for superannuation complaints as of 2025).
- Not a Court: Ombudsmen can’t award punitive damages, issue fines, or set legal precedents.
Real-World Example: When the Ombudsman Makes a Difference
Consider Sarah, a Melbourne homeowner who disputed a rejected insurance claim after storm damage. Her insurer refused to pay, citing ‘pre-existing damage.’ Sarah took her case to AFCA, submitting photos and timelines. The ombudsman found in her favour, noting new 2025 guidelines around climate-related claims, and ordered the insurer to pay out. The process was free, resolved in eight weeks, and didn’t require legal representation—demonstrating the ombudsman’s crucial role in levelling the playing field.
Is the Ombudsman Right for You?
For most Australians, the ombudsman system offers a fair shot at resolving disputes—especially when the power imbalance with big companies feels overwhelming. But it’s not a silver bullet. Understanding the process, knowing the limits, and preparing your evidence can make all the difference in getting a result that sticks in 2025’s evolving consumer landscape.
