A woman awarded $485 in compensation for a bank bungle that she alleges cost her thousands of dollars says the scheme that deals with banking complaints is inefficient and unfair.
Her case comes as complaints to the ombudsman are running at high levels and the system is widened to include every financial service provider.
The increase in complaints is attributed to growing awareness and the fallout from the global financial crisis.
Since March 31 last year, anyone who provides any financial service - such as an insurer, bank or financial adviser - must belong to a complaints scheme, whether it's an ombudsman or a newer organisation such as Financial Services Complaints.
A consumer with a complaint must take it to the organisation of which their provider is a member.
The woman, who did not want to be identified because she is now taking her case to the Disputes Tribunal, is calling for an overhaul of the system.
But banks and lawyers say the system is working well and recent changes have improved it.
The complainant was quoted loan repayments for a mortgage that was $100,000 less than the amount needed to buy her house. "The day before we were due to exchange keys, we found they had not quoted enough to buy the property."
She and her husband had to borrow more to go ahead with the purchase and she says the stress contributed to his heart attack.
The banking ombudsman found the bank had made a mistake but awarded only $485 in compensation - the difference in the amount of interest the couple would have paid had the whole loan been fixed at the same time and the higher interest rate they now pay on the extra portion.
The complainant says the ombudsman took a year to deal with her complaint.
The ombudsman's office acknowledges that there were delays, but says they were resolved by the end of the year. Banking ombudsman Deborah Battell says her office deals with 4000 people a year. She ruled in their favour in just under half the cases that fell under her jurisdiction in the last six months of last year.
"It is important to understand that we try to resolve complaints first," she says. "A formal decision is made either in favour of one party or the other, in whole or part, only if the parties are unable to agree."
She says it is not always a matter of winning or losing. "We may provide an explanation, we may work with parties to come up with an affordable repayment plan for loan defaults, or we may provide an independent view on an offer that one of our participants has made to settle a matter."
Battell says that in the past two years her office facilitated $18.3 million in compensation. "In cases where we find the bank has caused direct losses, we can award up to $200,000. Compensation for stress and inconvenience may total $9000."
When awards are low, it is usually because the bank has not been responsible for the direct losses claimed, the actual direct loss is small, or the main loss is stress and inconvenience. "People may not always agree with our decisions, but we do our best to ensure they are well-reasoned and explained."
People can request an independent review.
Financial Services Complaints has 4000 members offering financial services, and chief executive Susan Taylor says the number of complaints has increased. "I don't think it's an easy thing to make a complaint. In some cultures it's not the done thing."