2016 - 2017
Mr J was the director of farming company which bought a range of interest rate swaps from the bank. Interest rate swaps are a financial product that affects the interest paid on lending. Their sale has been the subject of an investigation by the Commerce Commission.
The company bought the swaps between 2007 and 2009. The company’s lending had a range of maturities to spread the risk. The customer had chosen not to be a party to the Commerce Commission investigation into interest rate swaps because, he said, he had not realised at the time that the swaps were the wrong product for the company. He said he had also not understood the effect of the swaps.
Mr J complained to us that the company was not a suitable interest rate swaps customer. He also said the bank failed to disclose key terms of the swaps. As part of his complaint he submitted documentation showing that the bank had alerted him to the effect of the swaps, and that he had received and acted on this advice.
Our rules don’t allow us to investigate a complaint were a customer knew or ought to have known about the facts for more than six years. The documents Mr J provided to the scheme supported that he knew in 2009 about the issues which he was complaining to us about now.
Unfortunately for Mr J, this meant we couldn’t investigate his complaint because it was outside our jurisdiction.