New Zealand’s Financial Ombudsman Service, Financial Services Complaints Limited (FSCL), has seen a significant increase in complaints and disputes in the past year, marking the highest figures since its establishment in 2011.
FSCL Financial Ombudsman Susan Taylor said that although growth has slowed, the service has set new records for complaints and disputes.
FSCL revealed that complaints rose by 6% to 1,426. New disputes, which involve formal investigations by the service, increased by 10% to 359. There was also a 33% rise in completed investigations.
Taylor said the steady increase in financial services complaints reflects the broader economic challenges.
“We expect this high level of complaints to persist as long as economic conditions remain difficult. The new rules increasing our financial loss compensation to $500,000 (previously $350,000), which took effect in July, could also lead to a further rise,” she said.
Complaints against lenders made up the largest share of investigations, particularly involving car, personal, and small business loans. Consumer credit product complaints accounted for 29% of the formal investigations, followed by credit cards at 14% and mortgage loans at 11.5%.
There were also increases in complaints against financial advisers (18%), insurers (14.5%), and card issuers (14%) compared to the previous year.
FSCL noted that common consumer issues included financial hardship, miscommunication, fraud, scams, and business loans.
Taylor said miscommunication remains a central issue in many FSCL investigations.
“This can include breakdowns in passing on important information, poor understanding of clients, and ambiguous or poorly worded communication,” she said.
A recent report from the Financial Markets Authority (FMA) revealed that while New Zealanders generally agree on what constitutes fairness in financial services, only 74% expect fair treatment from their financial service providers.
Taylor said that more financial service providers are now focusing on achieving fair outcomes for their clients and customers.
“I’m pleased to report, we’re starting to see an increasing number of our financial service providers just ‘doing the right thing’ by concentrating on a fair outcome for their clients and customers,” she said.
Individuals with issues involving financial service providers can file complaints with FSCL at www.fscl.org.nz, by calling 0800 347 257, or by emailing [email protected].
A recent independent review of the Insurance & Financial Services Ombudsman Scheme (IFSO) commended the scheme’s professionalism, transparency, expertise, rigor, and balanced approach.
