Bank complaints are expected to increase as people go through tougher economic times. Photo / File
Bank complaints are expected to increase as people go through tougher economic times. Photo / File
New Zealand's Banking Ombudsman is preparing for an onslaught of complaints about the sector as the economy takes a dive and more people come under financial pressure.
Nicola Sladden, chief executive of the free complaints service, said after the global financial crisis it saw a 66 per cent rise indisputes and that was excluding cases relating to two failed funds that were sold by the ANZ.
"There is a reasonably strong correlation between the state of the economy and our caseload. Our caseload is holding steady at the moment, although we are expecting to see an increase in complaints as a result of more people facing financial difficulties."
"We may experience a three-month lag, just as we did after the global financial crisis. We expect the cases will generally relate to lending, financial hardship and debt recovery."
For now, it was planning and preparing for a similar increase in cases as post-GFC.
Sladden said it could take on more staff but was also looking at how it prioritised cases to ensure those in financial hardship were dealt with quickly as well as complaints from vulnerable consumers.
It had also been working proactively with the banks and budgeting advice service FinCap to try and front-foot potential problems, she said.
"Ideally, the prevention activity will flatten the curve of complaints."
The ombudsman scheme meant complaint numbers dived during the lockdown. Case numbers were 22 per cent down in April compared to April last year, but they have bounced back since then.
Sladden said during April about one in every five cases related to Covid-19, although that had now fallen to about 5 per cent of cases.
Banking Ombudsman Nicola Sladden says it is bracing for an increase in complaints. Photo / File
Common themes were complaints about KiwiSaver delays - particularly in relation to withdrawals and fund changes and applications for the six-month home loan deferral scheme being declined.
"We received more calls about investments, particularly KiwiSaver. We were hearing concerns about delays in transferring funds and processing withdrawals, as well as the volatility of the market and the safety of funds."
Sladden said it had advised banks to give customers clear timeframes about how long it took to process requests to change KiwiSaver funds or other investments so customers knew when funds were likely to be available.
Complaints relating to declined mortgage deferrals applications were typically because of customers' prior account conduct, Sladden said.
"We encouraged banks to act with empathy and explore all forms of hardship assistance for these customers, including promoting the use of free budgeting advice services, such as MoneyTalks, which may be able to offer further support."
Sladden said it had been pleased with bank responses so far.
A survey by the New Zealand Bankers Association last month found New Zealanders' broadly positive attitude towards the banks had increased slightly but not significantly and this had been spurred by the introduction of the six monthly mortgage deferral scheme.
Of those surveyed, 62 per cent had a positive attitude towards banks, up two percentage points on the February research and 17 per cent were negative down four percentage points.
Those who described the banks as helpful pointed to the mortgage deferral scheme and good communication from the banks.
But it also received negative feedback on the scheme. Some criticised the deferrals as giving banks a veneer of "heroes" or talking a good game about helping clients, but were disappointed that interest would still accrue on the loans while the deferral was in place.
