Complaints to Banking Ombudsman double

Interest rate volatility, the failure of sophisticated investment instruments and general financial hardship were key drivers of a near doubling of complaints to the Banking Ombudsman in the 2008/09 year.

The office received 1888 formal complaints, an increase of 99 percent on the previous year, according to its annual report.

It resolved 1590 cases, an increase of 84 percent; 607 disputes, an increase of 125 percent; and facilitated more than $7 million in compensation to complainants.

At year end, 123 disputes were on waiting list.

Ombudsman Deborah Battell said a large number of complaints centred on the poor performance of investment products, in particular two investment funds provided by ING (New Zealand) Ltd through ANZ's branch network.

Complaints related to misrepresentations about the risks and likely future performance associated with the funds as well as inappropriate advice as to the proportion of an investor's portfolio that should be invested in these types of products.

There was also an escalation in complaints about early mortgage repayment fees.

Ms Battell said considerable pressure was placed on the office's resources, necessitating an additional levy on banks to cover the cost of the increased workload.

During the year Liz Brown retired after 15 years as Banking Ombudsman.

"Liz Brown has left a strong legacy," said Ms Battell.

- NZPA