The Financial Ombudsman Service (FOS) says there has been a steep increase in disputes over customer service and the quality of advice.

The FOS has released its annual report, which shows that disputes across the sector have jumped by 16 per cent in the 2016-17 financial year.

The community concerns with financial service businesses were also reflected in the rising number of phone inquiries, which were up by 10 per cent to 235,372.

The ombudsman's website also saw 13 per cent more activity for the year.

Chief ombudsman Shane Tregillis said many people were complaining about the same systemic issues, rather than just one-off problems.

“We identified and referred 192 possible systemic issues to financial services providers for response and resolved 66 definite systemic issues,” he said.

“More than 940,000 customers were affected by these systemic issues, leading to significant refunds and other remedies such as amendments to, or removal of, credit listings.”

About a third of credit disputes were related to credit cards, a quarter involved home loans and 20 per cent were about personal loans.

In the investments sector, most complaints were about inappropriate advice.

Around half the life insurance complaints were to do with income protection products, while a quarter involved the denial of a claim.

Mr Tregillis said recent changes in the general insurance secotr appeared to have driven a rise in disputes.

“Higher claim numbers, organisational changes and the impact of Cyclone Debbie, all of which may have affected insurers' internal dispute resolution,” he said.

Banks drew the largest share of complaints, being at the centre of 41 per cent of all disputes.

The report is accessible here.