Bank disputes at historic high
The twenty-year anniversary of New Zealand's bank dispute resolution service has shone a light on how Kiwi's banking bugbears have changed over time.
The Banking Ombudsman Scheme released its annual result for the 2011/12 year today, which shows banking disputes remain at historically high levels. In the 20 years since inception, the scheme has resolved 20,000 cases and helped dish out $36.9 million worth of compensation.
Banking Ombudsman Deborah Battell said the complaints received had evolved over the years in line with new technologies, banking services and products.
"For example, cheque-related cases made up 21 per cent of our caseload in 1992/93, but only 3 per cent this year."
While complainants used to call or write, nowadays they email or even get in touch on the Ombudsman's Facebook page.
The Ombudsman's caseload grew steadily through the 1990s and escalated in response to the 1997 Asian financial crisis. Towards the end of 1998, a rapid drop in interest rates led to people complaining about early repayment costs as they paid off debts. Credit card fraud was also on the rise.
Caseloads stabilised and then began to drop off until the global financial crisis struck in 2008. That sparked a wave of complaints, many related to bad investments, which peaked last year.
Battell said banks were becoming more attuned to meet the needs of their customers, but the Ombudsman scheme was as important as ever.
In 2011/12 the number of overall complaints dropped, but the cases that turned into formal disputes spiked 20 per cent. Half of all new complaints and disputes this year related to mortgages, credit and debit cards, and other consumer or business finance. Financial frustrations included the way customers in arrears were treated, early repayment costs, interest rates and mortgagee sales.
Battell said banks could help avoid complaints by setting more realistic expectations of their service, and providing customers with better information. But customers needed to do their bit, too- by asking questions, reading contracts properly and making sure they knew what they were signing up for.