Banking Ombudsman turning attention to internet and mobile banking as overseas evidence shows rising complaint levels in new banking areas

Banking Ombudsman turning attention to internet and mobile banking as overseas evidence shows rising complaint levels in new banking areas

By Gareth Vaughan

Banking Ombudsman Deborah Battell says her office is starting to get complaints from bank customers about mobile and internet based banking services, and says she's concerned about the attitude towards debt among some young people who want the latest consumer goods whether they can afford them or not.

Battell told interest.co.nz that overseas evidence is providing a range of reasons for increases in complaint volumes across the financial services sector. These include new products, services and ways of doing business, increasingly complex financial products, customers having to increasingly do things themselves, growing consumer awareness of disputes resolution schemes, plus increased regulation following the global financial crisis.

The Banking Ombudsman's office is about to release its annual report and Battell said the number of complaints to her about mobile and internet banking aren't yet significant, but are starting to come in.

"We've now gone back and relooked at all our categories and we've now got separate categories for some of these products so we can better determine whether some of these products are causing problems," said Battell. "So we'll be able to give better information on that in the coming year."

Another issue in focus was the attitudes of some young people towards borrowing. 

"There's a sense that there are consumer goods they must have, iPads, iPods, Samsung Galaxy phones, those sorts of things," said Battell. "And young people purchasing things they don't necessarily have the money for and getting themselves into debt. There does appear to be some attitude related problems."

With mobile banking Battell noted one good aspect was customers should always have their bank balance "right there" at their fingertips. And, with increasing use of debit cards rather that credit cards, the opportunity is there to manage their finances more effectively.

"Whether they actually choose to do so or not is another matter," said Battell.

Overall, Battell said, the majority of complaints crossing her desk were loan, or lending, related.

Advice for customers & banks

Her advice for customers was to make sure they know what they're signing up for.

"Make sure the lending is affordable, make sure you think beyond the immediate, try and think about what risks you face, (such as) what's the likelihood you might lose your job, what's the likelihood if you're entering into a fixed-term rate that you might need to break it to move countries or cities or whatever," said Battell.

"It's around getting good advice and constantly monitoring your accounts and your financial situation. And getting into the bank early if there's likely to be any sign of difficulty so that the customer can work with the bank to find some kind of early solution."

Her other message for bank customers is, if your situation's looking bleak, "pull the plug early because the longer you let a situation go on typically the worse it will get."

As for bank staff, Battell suggests they make sure customers understand what they're signing up for.

"Make sure that people understand the benefits and risks clearly so that customers are given good information and that it's information which they can understand, that's the main thing."

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