2024 Media releases

Banking disputes scheme gets high mark in independent review

25 October 2024

The Banking Ombudsman Scheme has scored highly in an independent evaluation of its operations, a report by the reviewer released today shows.

Consultant Deborah Hart, who conducted the five-yearly review, found the dispute resolution scheme met its terms of reference, strategic objectives and legislative requirements, the last of which concern its accessibility, independence, fairness, accountability, efficiency and effectiveness.

“Overall, this is very positive report card,“ said Banking Ombudsman Nicola Sladden. “It confirms that we are making a valued and credible contribution to a fair banking sector.”

The review rated the scheme highly for its dispute resolution work and ability to pinpoint the causes of complaints and share insights with banks and others to improve the overall banking experience.

It also acknowledged the scheme’s rigorous and credible approach to reaching decisions, noting that the scheme had satisfactorily implemented the recommendations of the last review, which Ms Hart also conducted.

Ms Sladden said the review made 11 recommendations, all of which the scheme agreed with and was either already implementing or considering how to implement.

She said the scheme was committed to continuously improving how it worked, and the report would help in that effort.

“We know there are areas where we can improve as we grow in size and face increasingly complex cases, especially those relating to fraud and scams, which continue to make up a large share of our workload.

“We are in the middle of technology and process improvements that will strengthen our ability to analyse and draw insights from complaint data, and we will also continue to work with government agencies, regulators, banks and consumer groups to ensure fair outcomes in a cost-effective and transparent way.”

 

A copy of the review is available here: review report, together with our preliminary response

Complaints about banks hit record high, says banking ombudsman scheme

23 September 2024

Customers complained in record numbers to the Banking Ombudsman Scheme in 2023-24, according to its latest annual report.

The scheme received 6,054 cases, or an average of more than 500 a month, which was up 8 per cent on the previous year and the highest since the scheme started in 1992.

Banking Ombudsman Nicola Sladden said a 27 per cent rise in scam-related complaints – also the highest on record – was the biggest factor in the increase.

Scam cases made up 949 of the 6,054 total, which Ms Sladden attributed to the continual emergence of new and more sophisticated scams.

The average loss from scams investigated by the scheme was also up sharply – from $57,000 last year to $80,000 this year – an increase of 40 per cent.

Phishing and investment scams continued to predominate, with the latter causing the steepest losses for customers. Ms Sladden said a feature of the year was the increase in unauthorised payment scam cases, in which customers were duped into sharing their banking credentials with criminals.

She said banks and other organisations needed to take more co-ordinated action to slow this disturbing trend.

“We have been calling for some time for such an approach. One immediate way to provide better protection for consumers against scams would be to introduce comprehensive, mandatory codes of practice for banks, telecommunication companies and digital platforms governing their responsibilities in preventing scams and the scope of their liability.”

Ms Sladden said high interest rates, rising prices and generally tough economic conditions continued to make themselves felt in the scheme’s workload, and it was urging banks to remain alert to customers in financial difficulty and offer suitable assistance.

Banks themselves received more than 98,000 complaints during the year, according to the scheme, which collates complaint data on behalf of banks and updates the results on its website. Problems with service accounted for almost half of all complaints, with complaints about delays, queues and waiting times up 9 per cent.

See the annual report attached.

Media contacts

Nicola Sladden, Banking Ombudsman
[email protected]
021 808 059 

 

Sarah Brooks, Deputy Banking Ombudsman – Prevention
[email protected]
021 277 4232

Increased compensation limits for financial disputes

11 July 2024

Financial limits for complaints are being raised across the four approved financial dispute resolution schemes, from 18 July 2024, meaning more consumers can have their disputes resolved without going to court.

The government is aligning the rules of the four approved financial dispute resolution services, giving more consumers access to free dispute resolution.

The four services—the Banking Ombudsman, the Insurance & Financial Services Ombudsman Scheme, Financial Services Complaints – a Financial Ombudsman service, and the Financial Dispute Resolution Service—will have the same thresholds for complaint values and compensation, providing consistency for consumers across the sector. The services provide free, fair, and independent resolution of customer complaints about financial services.

The key change is raising the maximum compensation to $500,000 +GST. Previously, consumers with financial disputes over $350,000 +GST (or $200,000 +GST for the Financial Dispute Resolution Service) were not eligible for free dispute resolution and would have to go to court instead. 

Additionally, the maximum compensation for non-financial loss, such as stress and inconvenience, will increase to $10,000 +GST, and what this can be awarded for will be standardised across all four services. 

The services fully support the changes and believe that aligning the rules will enhance and standardise access to independent dispute resolution. The changes represent a significant step forward in ensuring that more consumers have access to free and fair dispute resolution. 

The Financial Service Providers (Rules for Approved Dispute Resolution Schemes) Regulations 2024 will take effect on 18 July 2024.

 

Media contacts

Banking Ombudsman

Sarah Brooks, Deputy Banking Ombudsman – Prevention

[email protected]

021 277 4232