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More talking could avoid bank-customer woes

More talking could avoid bank-customer woes, says Banking Ombudsman

A lack of good communication can be blamed for most complaints about banks, says the new head of the Banking Ombudsman Scheme.

Banking Ombudsman Nicola Sladden, who took up the role at the beginning of the month, said banks needed to give timely, easy-to-understand information about how accounts, products or services worked so customers could decide whether they really suited their needs.

But she said the need to communicate cut both ways.

“Banks must disclose all the information a customer needs to know before signing on the dotted line, but equally customers have to make sure they understand what they’re entering into.

“If you’re unsure, five or 10 minutes spent talking to a bank consultant will avoid a lot of misunderstandings – and also potentially a lot of trouble down the track.”

Ms Sladden said the scheme dealt with more than 3,000 cases last financial year, and the underlying causes of complaints and disputes remained much the same as in previous years, split equally between customer service and debt collection.

“Customer service complaints invariably come down to poor communication – customers saying that staff have failed to act as instructed or promised. Last year, this was particularly so over signing authorities on transactional accounts and property lending. Again, improved communication could prevent many of these problems.”

She said a recent case illustrated this point perfectly. A customer with two mortgages on two properties decided to sell one because he was struggling with repayments. Mistakenly, he thought the $20,000 left over from the sale would be available to use as he wished, but the terms of his loans meant it had to go towards repaying the second mortgage.

“He had the right idea about trying to get his debt down, but had all the information been at his disposal, he probably wouldn’t have put the property up for sale. It only brought him disappointment, something a more informed decision would have avoided.”

Banking Ombudsman Scheme Money Week tips to keep your money where you want it:

• Plan ahead, for all eventualities before making decisions as circumstances could change.

• Manage your accounts closely and know how much you have at all times.

• Look after your cards and PINs and report problems such as fraudulent transactions or lost cards as soon as possible. If a bank has evidence that you haven’t be careful enough, you may end up out of pocket in the event of unauthorised transactions. Keep your contact details up to date so your bank knows how to get in touch with if need be, and let it know when you are going away.

• Tell your bank when you realise you are in financial difficulty. Some hardship complaints we investigate might have been sorted earlier if the bank knew of the problems earlier.

• Take independent advice if you are considering guaranteeing somebody else’s debt. If you are looking at investing yourself, do your homework first.

• If you think something’s not right and you haven’t been able to resolve it with your bank, you can complain to the Banking Ombudsman Scheme.

Visit our website for quick guides about common banking issues.

ENDS

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