Banking complaints increase 6%

WELLINGTON: Complaints about banks are on the up but the number of disputes has dropped, the latest report by the Banking Ombudsman Scheme shows.

Just over 3100 people made complaints during the latest financial year — a 6% increase.

Of those, 140 escalated their complaints to disputes — which was a decrease of 3%.

Banking ombudsman Nicola Sladden believed the rise in complaints was because customers were more willing to seek help when they encountered problems with their banks.

‘‘We encourage customers to speak up, ask questions and make complaints,’’ she said.

‘‘It’s inevitable that things will sometimes go wrong. What matters is how problems are put right.’’

Ms Sladden credited the scheme’s early resolution service for the drop in disputes, saying 96% of complaints were resolved in a matter of days.

‘‘The key is to nip problems in the bud early.

‘‘When people have problems, they need to be heard and responded to as quickly as possible,’’ she said.

‘‘Our new fasttrack process for resolving complaints by customers in financial difficulty proves this point, and we’ve seen cases where banks have responded with exemplary promptness and support.’’

The most common complaints were about bank accounts and lending — home loans, credit cards, overdrafts, and personal and business loans.

This was followed by payment methods, such as internet banking and overseas transfers, bank cards and investments.

Ms Sladden said the closure of branches and ending of cheques had also resulted in complaints.

‘‘Covid19 has accelerated the already rapid change to digital, contactless banking.

‘‘Although banks have provided help for this transition, there’s no doubt some people have felt left behind.’’

The service continued to receive a ‘‘steady stream’’ of complaints from people who had lost money to scams or fraud.

‘‘Scams, including telco, romance and investment scams, can affect anyone and can be truly devastating.

‘‘We urge people to be extra careful online, and to contact their bank immediately if they think they’ve been scammed.’’

In general, the scheme considered whether banks had treated customers fairly, communicated clearly and acted with reasonable care, Ms Sladden said.

The report featured cases where banks fell short, including giving an inadequate response to a hardship request, offering unaffordable credit increases, and ignoring a problem gambler’s request not to be given credit.

Ms Sladden said the scheme’s work also had a prevention focus, which included analysing complaints and sharing the resulting insights. — RNZ