Use of Banking Ombudsman Scheme exceeds estimates

Use of Banking Ombudsman Scheme exceeds estimates

The Banking Ombudsman Scheme received 16% more cases in 2012/13, blowing expectations use would decrease as consequences of the global financial crisis eased.

“While GFC-related complaints are down, contacts remained high due to public interest in legislative change such as the introduction of anti-money laundering legislation, the bank fees litigation and the ANZ/National bank brand merger. Enquiries alone increased by a third.

“In addition, complaints from small businesses increased – they made up just over one in 10 complaints. While the GFC is no longer affecting personal banking customers, it appears small business are still feeling its lag effect,” says Banking Ombudsman Deborah Battell.

The scheme has released its Annual Report 2012/13. Nearly a third of 2012/13 dispute cases inside jurisdiction resulted in a favourable outcome for customers, either partially or in full. Customer compensation increased to $598,000 in 2012/13 from $505,139 the previous year.

“One developing trend to watch is the shift away from the previous close correlation between a bank’s market share (measured by its share of total bank lending) and the number of cases received by the Banking Ombudsman Scheme.

“When we first started comparing a bank’s market share with the cases we received, we found that there was a close correlation between the two. If a bank had, say, 20% of the market share, it generally had about 20% of the share of cases we received.

“This is changing, along with the balance between large and medium-sized banks. Large banks accounted for a smaller percentage of cases last year – down from 84.6% to 81.7%, compared with 88.4% of the market. Medium-sized participants, whose market share is 11.4% accounted for 17% of cases compared with 14.4% last year.

“These changes could be due to a number of factors, including that some banks are improving their customer service or complaints-handling more than others, some banks have chosen to make greater use of independent dispute resolution and because newer participants’ customers are becoming more aware of the Banking Ombudsman Scheme.

“The Annual Report contains information about trends in banking-related issues from a customer perspective and charts our continued progress towards being a world-class Ombudsman service that is universally trusted and valued for its independence and fairness,” says Ms Battell.

A hard copy can be requested by calling 0800 805 950. For more information about the scheme go to www.bankomb.org.nz.

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