The way banks deal with complaints is in the spotlight, with an industry watchdog promising to be more vigilant about whether customers' problems are properly handled.

The extra scrutiny comes in the wake of scandals uncovered by Australia's inquiry into the financial services industry.

New Zealand's Banking Ombudsman service receives thousands of complaints and inquiries from consumers every year, and every three months it refers about 600 back to the banks to deal with.

Consumers are told they need to complain to their bank first, but can come back to the service are if they are not happy with the bank's response.

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Just 5 per cent of those who are sent away then come back to the ombudsman service.

But Banking Ombudsman Nicola Sladden said that from next month it would begin auditing those it turned back to the banks, to make sure they were being treated fairly.

"While we believe that banks are delivering fair outcomes, we want to check that has been the case," she said.

The service, which is funded by the banks, will also begin collecting industry-wide data on complaints.

Until now it has only been able to gather information on trends in the industry from the complaints it receives - which are just a fraction of banking complaints.

But in response to a call by regulators for New Zealand banks to prove they are different to their Australian counterparts, the New Zealand Bankers Association has said it will provide internal dispute resolution information to the Banking Ombudsman.

The ombudsman has an information sharing arrangement with the Financial Markets Authority and provides information on a quarterly basis.

It also has a duty to tell the regulator in cases when it sees a series of complaints relating to the same area of conduct.

Sladden said that series requirement in its reporting meant it wasn't able to tell the regulator about an individual case of misconduct.

"We want to change that."

Its reporting threshold requirements are being reviewed by the select committee looking at the Financial Services Legislation Amendment Bill.

Sladden said she had not seen any evidence of systematic or widespread misconduct among New Zealand's banks.

"Miscommunication between banks and customers is the underlying cause of most of complaints we look into."

Data from the scheme shows that the areas of concern in Australia have prompted only a small number of complaints here.

In the two-and-a-half years to March 31, the New Zealand service had handled 9577 cases, but less than 1 per cent involved allegations of irresponsible lending.

Inappropriate selling by mortgage brokers featured in 0.5 per cent of cases while inappropriate selling of insurance by banks related to 4 per cent of cases.

Of the insurance cases, 7 per cent were about non-disclosure and 5 per cent were concerns about advice or information.

While 7.5 per cent of the cases involved fees and charges, Sladden said it did not have jurisdiction to consider complaints about a bank's charges for financial services, nor about its interest rates.

"But we can consider complaints alleging that a bank failed to disclose fees or that it misrepresented information about fees or rates."

Sladden said it had seen a spike in inquiries in the wake of the Australian commission and was monitoring those complaints.