Poor service nets $3k for customer

A customer who was compensated $3000 for the way his bank handled his financial difficulties was one of more than 10,000 who complained about the service they received last year.

The Banking Ombudsman scheme operates an industry dashboard, tracking data across all the banks. A portion of complaints, which cannot be resolved by the bank and customer directly, are investigated by the scheme. For the 2020 year, banks reported they had received more than 100,000 complaints.

In the last quarter of the year, they recorded 27,800, and nearly half related to service issues. In one case, a man fell into credit card debt after he quit his job for another, but that new position did not come to fruition.

He tried to withdraw his KiwiSaver funds to help but the provider told him to ask his bank for assistance first. He called and asked the bank to confirm it could not make assistance available to him but was told the bank did not keep that sort of letter on file.

A few months later, the bank issued a demand notice for full repayment of his debt. Its staff had tried to call, write and email him. When the debt was not paid by the due date, the bank referred it to a collection agency.

The man read the bank’s letters when he returned from several months away. He made a formal complaint that the bank had not made adequate attempts to contact him and also requested personal information.

This communication from the customer was lost and nothing was done about the complaint or request.

He raised the matter again six months later after the debt collectors started contacting him, and the bank started investigating. He made two further requests for information, but these were not responded to, either.

The bank eventually offered to reduce the debt by $1600 and to pay $1000 for the inconvenience resulting from its failure to respond to his first information request in the timely manner.

He went to the Banking Ombudsman instead. The scheme ruled the bank had not advised the man of his rights under the Credit Contracts and Consumer Finance Act’s hardship provisions.

‘‘If unable to offer him help, the bank was obliged to advise him of this in writing – and he would have had the letter he needed for his KiwiSaver application.’’

He was given $3000 in compensation for stress and inconvenience.