Bank complaints at fiveyear high
BANK complaints have increased more than 20% to a fiveyear high in the wake of intense scrutiny on the sector.
There were 3108 complaints in the year to June 30, up 21% from 2565 in the prior period, figures from the Banking Ombudsman show.
Total cases, including inquiries, rose 21% to 4797 while disputes, the most serious of cases, were up 27% to 183.
Banking Ombudsman Nicola Sladden said the increase was driven by the heightened awareness of issues in the banking sector after Australia’s Royal Commission and a culture and conduct review by New Zealand regulators the Financial Markets Authority and the Reserve Bank.
‘‘We’ve seen this coming through in our cases. We’ve had more cases, and they are more complex.’’
Ms Sladden said lending was the most common area of complaint, followed by bank accounts and payment systems, but all areas of banking had generated more complaints.
There were 1104 lending complaints, up from 1005 in the prior year, and 1062 complaints relating to bank accounts, up from 902.
ANZ bank had the highest percentage of cases against it, at 19.3%, or 925 cases, but that was below its 30.3% market share of total assets.
Westpac New Zealand had the secondlargest number at 15.2%, or 730 cases, compared with its 18.2% of total assets, and Kiwibank had the thirdhighest at 12.2%, or 583 cases, compared with its 4.1% of assets.
A Kiwibank spokeswoman said while it had smaller total assets in comparison to the big four, it had a comparable customer base with more than one million customers.
Westpac had the highest number of disputes — 65 out of 183, or 35%, were linked to the bank. ANZ had the next highest at 29 disputes.
A Westpac spokesman put its high number down to promoting the ombudsman service to its customers.
‘‘We know this may result in a heightened number of recorded disputes, but believe doing so can help provide the best outcome for our customers.’’
The spokesman said the bank was working to identify and address the underlying causes of complaints and the proportion of disputes related to Westpac had fallen since June 30.
‘‘This is not captured in the reporting period in the Banking Ombudsman’s report.’’
Ms Sladden said there were various reasons a bank could have a high number of disputes.
‘‘It could reflect maturity in its own ability to handle complaints inhouse and it could be related to the fact they have promoted the use of the scheme.’’
Ms Sladden said the Westpac disputes related to a variety of complaints, not any one particular issue.
She was confident Westpac was taking the necessary steps to ensure complaints were being handled appropriately.
But she urged any Westpac customers who had concerns about the way their complaint had been handled to get in touch with the Banking Ombudsman scheme.
Ms Sladden said all banks needed to do better in the way they handled complaints.
‘‘I think the message coming out of the regulatory review is all banks need to continue to invest in the ways they identify and deal with customer complaints.’’
While the ombudsman service had not seen the same type of systemic abuse cases as arose in Australia, Ms Sladden said it knew it saw only the tip of the complaints iceberg.
‘‘We have therefore begun developing a dashboard which will bring together complaints data from our cases and the banks. This is due to go live in mid 2020.’’
The ombudsman scheme also saw a rise in the number of complaints about banks dumping customers because of the customer’s conduct or because the customer could not satisfy requirements under antimoney laundering legislation, such as provide an address or proof of where funds came from.
‘‘While banks do have a right to terminate a relationship, they need to do it in a fair way.
‘‘Financial inclusion is a really important policy issue and we are trying to work with the Government on this.
‘‘We do feel concerned about people who can’t have a bank account and therefore can’t receive their income.’’ — The New Zealand Herald