Grievances against financial institutions are up by 35%
The bulk of complaints received by the Financial Services Complaints Limited (FSCL) in the year ending June 30 have been complaints against lenders, according to FSCL’s latest annual report.
The report recorded a 35% increase in complaints, and it has been the busiest year to date for the dispute resolution scheme.
According to FSCL chief executive officer Susan Taylor, complaints against lenders accounted for 21% of the total complaints, with responsible lending being raised as a recurring theme.
“By and large, we find lenders are complying with responsible lending obligations and are doing their best to help borrowers facing a period of financial hardship,”she said. “However, we have received complaints where lenders have not met their obligations, which has had severe consequences for borrowers.”
Taylor welcomed work to tighten up parts of the Credit Contracts and Consumer Finance Act 2003, saying this would give greater clarity around what lenders must do to comply with lender responsibility principles.
Meanwhile complaints against insurers, particularly in relation to travel insurance, once again made up the greatest proportion of cases investigated, sitting at just over a third.
“We think the overall increase in complaints partly reflects the growing consumer awareness of the dispute resolution services available along with the extra resources we have put into publicising our services and working with consumer advocates,” Taylor explained. “However, there is still room for improvement.”
In line with this, Taylor noted that FSCL had submitted on regulations under the Financial Services Law Amendment Bill that it should be mandatory for advisers to tell their clients about their external dispute resolution scheme when a complaint arises.
“The best way for a consumer to find out about us when they need us is through their financial services provider,” she stated.
