By Andrew Mitchell*
Did you know that Aotearoa New Zealand currently has four separate financial dispute resolution schemes? If you can name them all, I’d be very impressed. They are the Banking Ombudsman, Insurance and Financial Services Ombudsman, Financial Dispute Resolution Service and Financial Services Complaints Limited (FSCL), with public awareness ranging from just 14% to 46%.
That’s four different processes, four sets of rules, and four chances for confusion. For the people I support, often vulnerable, stressed and overwhelmed, this complexity isn’t just inconvenient, it’s a barrier to justice.
As a financial mentor with over a decade of experience, I’ve sat across from hundreds of New Zealanders weighed down by debt, people trying to do the right thing but caught in systems that are anything but straightforward.
Supporting these complaints across all four schemes, which could entail irresponsible lending, aggressive debt collection or inaccessible banking services, I know these schemes well, and I know that having four of them is far from ideal.
Groups like FinCap, CAB, Community Law and Presbyterian Support have long called for a unified scheme. Yet despite repeated reviews, the Government continues to sidestep the issue.
The most recent review of FSCL finally acknowledged what we’ve been saying all along: multiple schemes lead to inconsistent outcomes, reduced accessibility and confusion for consumers. Worse still, financial firms can “forum shop,” choosing the scheme they believe will be most favourable to them.
The Ministry of Business, Innovation & Employment’s own 2022 Consumer Survey showed that public awareness of these schemes is alarmingly low. In contrast, 83% of United Kingdom consumers are aware of their single Financial Ombudsman Service, and Australia unified its system in 2018. What’s holding us back from moving forward?
If the Government isn’t ready to commit to a single scheme, then at the very least, we need stronger oversight. The current Financial Service Providers (Registration and Dispute Resolution) Amendment Bill gives the Minister power to coordinate reviews, but the language is vague. Without guarantees of simultaneous reviews or consistent terms, we risk more piecemeal fixes.
No MPs mentioned a single scheme during the Bill’s first reading—a telling silence. Either our message isn’t getting through, or it’s being ignored.
I believe we can do better. A single financial dispute resolution scheme would mean:
- clearer pathways for consumers
- consistent standards and outcomes
- greater accountability for financial service providers
- a fairer, more accessible system for all
The Salvation Army strongly supports this change. Now is the time to start transforming. Let’s build a system that truly serves the people it’s meant to protect.
*Andrew Mitchell is the Financial Mentor Team Lead at Royal Oak Community Ministries for The Salvation Army.
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