The number of complaints made by First Nations people related to financial disputes has surged by 25 per cent in the last financial year, according to the Australian Financial Complaints Authority.
The Australian Financial Complaints Authority (AFCA) received 3,161 grievances from Aboriginal and Torres Strait Islander peoples around issues including unauthorised transactions, delays in insurance claims, and financial difficulty which rose by 17 per cent.
One in 10 complaints from First Nations people were linked to financial hardship, which is double the rate from the general population.
Another key issue from complainants was the failure of some firms to respond to hardships requests from Aboriginal and Torres Strait Islander peoples.
AFCA deputy chief ombudsman, June Smith, said their data showed a growing need for more effective and culturally appropriate financial services to ensure First Nations people can engage in economic and financial activities.
"More First Nations people are engaging with AFCA's free and fair service for resolving financial complaints," Dr Smith said.
"As complaints rise, so does the need for firms to better understand and serve the unique challenges faced by some communities in accessing even basic services that other Australians take for granted."
Dr Smith said financial firms needed to enhance their service offerings, particularly by addressing digital exclusion in regional and remote communities.
She said the closure of banks and ATMs in regional Australia was creating challenges for First Nations people accessing the services they need to engage in economic and financial activity.
"We encourage all financial institutions to reflect on how they are currently engaging with First Nations customers and to make the necessary changes to ensure they are providing genuine, tailored and culturally appropriate assistance," Dr Smith said.
The top three issues about financial products raised by First Nations customers were personal transaction accounts, personal loans, and comprehensive motor vehicle insurance, which rose by 47 per cent in the last financial year.
Dr Smith said it was "deeply concerning" to see such high rates of complaints of First Nations people experiencing financial stress.
"This is an area where firms must meet their legal obligations," she said.
"These figures point to serious challenges faced by First Nations customers in accessing fair and timely insurance services.
"This highlights a critical need for the industry to address these concerns and ensure that general insurance is equitable and responsive to the needs of all customers."
Dr Smith called for superannuation firms to change their processes for First Nations people who are being excluded from accessing their super, in some cases because of not enough ID requirements.
She said AFCA had tailored the way it engages with First Nations people, particularly for those who may be experiencing hardship or digital barriers.
"We understand that engaging with the AFCA complaint process can be stressful, especially for those facing financial or personal challenges," Dr Smith said.
"That's why AFCA provides additional support where needed, including offering flexibility in service delivery and timeframes and allowing people to appoint representatives."