Banking disputes hit 10-year peak amid financial hardship pressures, according to Banking Ombudsman Scheme, while fraud and scam complaints fall 40%

The Banking Ombudsman Scheme says the number of banking disputes it handles reached a 10-year high in the June 2026 year, with over a fifth of disputes involving financial hardship.

In its latest June-year annual report, the Banking Ombudsman Scheme says it investigated 283 disputes in the June-year, resolving 260 of them. Disputes increased 26% compared to a year ago and reached the highest level in a decade, according to the scheme.

Banking Ombudsman Nicola Sladden says the increase in disputes particularly applied to lending disputes, which rose 59% on the previous year. She says this was a result of growing financial pressure on many bank customers, with financial hardship being a factor in 20% of the disputes the scheme received during the June-year.

The scheme dealt with the most disputes about the country’s largest bank, ANZ (55), closely followed by ASB (54) and Kiwibank (52).

The scheme says it shortened dispute resolution timeframes despite the higher volumes.

“Complaints that escalated to formal investigation – disputes – were resolved in an average of 49 working days, down from 63 working days last year, a drop of 22%,” the report says.

Despite the increase in disputes, the overall case numbers that the scheme received in the June-year fell by 711 to 5,171 cases from last year’s 5,882.

The dispute resolution scheme says that across the 5,171 cases, it facilitated compensation or refunds worth $1.3 million, down from the $2 million in awarded compensation during 2025. The most common complaints were about loans, bank accounts and services. Overall case volumes fell 13% in the June-year.

Complaints down 14%

The scheme categorises cases as enquiries, complaints and disputes, with an enquiry being any other contact, such as a general query about banking. According to the scheme, a complaint is any expression of dissatisfaction about a bank which requires a response and a dispute is any case that has been considered by the bank, but there has been no resolution and the customer has requested the Banking Ombudsman Scheme independently consider their complaint.

Complaint cases fell by 14% to 3,310 during the June-year. The Banking Ombudsman Scheme reported it received the most complaints about ANZ during the June-year (786), followed by ASB (672), Kiwibank (540), Westpac (526) and BNZ (451).

Banks also report customer complaints to the Banking Ombudsman Scheme, reporting 93,159 complaints in the June-year, down 7% from the previous year. Customer satisfaction with banks’ complaint-handling rose from 88% to 91% according to the scheme.

In the June-year, the scheme’s whistleblowing service, which was established in 2021 and provides an alternative method for bank staff to raise allegations of wrongdoing without communicating with their bank, received one report and four enquiries about instances of alleged wrongdoing by banks.

This compares with two reports and three enquiries in the previous year.

During the same period, banks themselves received 90 reports of alleged wrongdoing – an increase of 27% on the previous year. Of those 90 reports, banks upheld 11 in some way, according to the scheme.

“The most commonly raised matters were bullying, harassment and discrimination, and other misconduct, each accounting for 25 reports. Policy and procedure concerns accounted for 19 reports. Collectively, these three issue categories accounted for 77% of all reports,” the scheme says.

Fraud and scams complaints fall by almost half

The scheme says fraud and scam complaints fell 40% to 398 cases in the June-year, but noted they were still a major source of complaints.

“More than 12% of our complaints related to fraud and scams, often involving unauthorised transactions,” Sladden says.

According to the report, banks strengthening scam protections under the Code of Banking Practice changed the nature of the cases the scheme sees.

“Alongside this change was an expansion of our jurisdiction, which enabled us to consider complaints involving receiving banks. The introduction of these changes was a recognition of the fact that scams increasingly involve more than one financial service provider,” the scheme says.

Phishing and information harvesting were the most common types of scams, followed by scams around online purchases and investments.

The scheme, which is funded through a levy on its members, can recommend up to $500,000 compensation to reimburse a bank customer's direct loss.

Banking Ombudsman Scheme members include; ANZ Bank New Zealand, ASB Bank, Bank of Baroda NZ, Bank of China (New Zealand) Ltd, Bank of India, BNZ, China Construction Bank (New Zealand) Ltd, Heartland Bank, ICBC, Kiwibank, Nelson Building Society, Rabobank NZ, SBS Bank, The Co-operative Bank, TSB and Westpac NZ.