Banks in red over complaints

By ELEANOR BLACK, Consumer Reporter

Some banks make it too hard for customers to lodge complaints against them, says the banking ombudsman.

In her annual report, Liz Brown says banks do not do enough to make information about the complaints procedure available to customers, and sometimes imply claims are too small to be investigated by the ombudsman - although she pursues sums as small as $10.

Ms Brown said though most banks dealt with complaints effectively, there were some disappointing exceptions.

"Poor training [means] staff simply don't know the answer to a question and don't like to admit they don't know."

One bank, which she would not name, was especially bad at rectifying mistakes in a timely and courteous manner.

"By the time someone has been through that sort of scenario they're not going to accept any settlement. They're going to want the bank manager's head on a platter."

Liz Brown also wants damages for inconvenience raised from the $2000 maximum to $100,000, the most she can award for direct losses.

She cited the example of a married couple whose Bali holiday was ruined by a banking blunder, saying they deserved more than the $2000 award they received.

Their travel agent and a friend had advised them to get cheques in American or Australian currency, but their bank convinced them they could use New Zealand cheques.

When they arrived, they could not exchange their travellers' cheques and spent all but the last two days of their holiday trying to get funds from home. They could not afford to go sightseeing or shopping, and spent most of their time at the hotel waiting for phone calls from home.

The banking ombudsman found they had "suffered a complete loss of the enjoyment expected from their holiday".

The ombudsman's office received 1112 formal written complaints and 3079 telephone inquiries in the year to June 30, about the same as last year.

In the past year, Ms Brown reviewed significantly more cases of card fraud, in which customers believed the bank shared responsibility with the person who misused their funds - 71 compared to 16 in 1995-1996.

Complaints over dishonoured cheques which should have been covered by sufficient funds were on the increase, Ms Brown said, and could amount to defamation.

Honour fees, the charges applied by banks when they allow customers to overdraw their accounts, were causing distress. Complainants said they did not ask for the service and did not want to be penalised for it.

A walk-in survey of 69 bank branches found 26 per cent did not have brochures about the complaints process and a further 28 per cent had brochures but they were hard to find, displayed at floor level or tucked behind other booklets. Only 46 per cent of branches made complaints information easily available.

Banking Association chief executive Errol Lizamore said member banks, including ANZ, BNZ, National and WestpacTrust, shared a code of practice requiring them to display the brochures and tell customers they could refer complaints to the ombudsman. It was up to individual banks to stick to the code.