The Banking Ombudsman Scheme's 2023-24 year featured a record number of cases against the backdrop of the increasing sophistication of scams and increased losses for banks' customers.
In the Banking Ombudsman Scheme's June 2024 year annual report Miriam Dean, who chairs the Scheme, describes the year as a busy and demanding one, fuelled by a record number of cases mainly about service issues, scams or the consequences of mounting financial pressures on consumers.
"This year’s workload, 6,054 cases [up 8%], was our highest to date. On average, we received more than 500 cases a month. In addition, disputes, were up 31% on the previous year," Dean says.
Banking Ombudsman Nicola Sladden says scam-related cases rose 27%, comprising one in five cases, and hitting a fresh annual high.
"The growing sophistication of scams and the resulting losses are matters of continuing concern to us. Scams made up 827 of the 3,704 complaints received this year. More scam-related complaints escalated to disputes this year."
"Indeed, the proportion was up 80% on last year, and they made up almost half of all disputes we considered. The average loss reported was $80,000, up from $57,000 last year. Phishing and information harvesting scams continued to predominate by volume, followed by online purchase scams. Investment scams involved the greatest loss reported by customers. Many resulted in life-changing losses for the victims," Sladden says.
Given this she welcomes the increase to $500,000 from $350,000 in the upper limit for compensation from direct losses the Scheme is able to pay out. During the June 2024 year, a total of $935,870 was paid out in compensation to bank customers, up from $679,000 the previous year.
Sladden also says property lending-related cases remained a feature of the caseload, with most about interest rate increases, and service and communication problems.
Of the total 3,704 complaints, 209, or 6%, were formally considered.
Meanwhile, Dean says there's an urgent need for comprehensive, mandatory codes of practice for banks, telecommunication companies and digital platforms governing their responsibilities in the prevention of scams and the scope of their liability.
"For some time, we have called for greater consumer protection against scams and the establishment of a national anti-scam centre. We support the Government’s directive to banks earlier this year to establish a confirmation of payee system and to explore a best-practice reimbursement regime," Dean says.
The Banking Ombudsman Scheme is almost entirely funded by levies on its 19 members. These totalled $3.84 million in the June 2024 year, up from $3.34 million the previous year. Its board has approved a 25% increase in levies for the June 2025 year. The Board currently consists of Dean, accountant Kenina Court, Consumer NZ CEO Jon Duffy, ANZ NZ CEO Antonia Watson and Kiwibank CEO Steve Jurkovich.
The scheme's members are ANZ NZ, ASB, Bank of Baroda NZ, Bank of India NZ, Bank of China NZ, BNZ, China Construction Bank NZ, Citi NZ, Heartland Bank, HSBC NZ, ICBC NZ, Kiwibank, Nelson Building Society, Unity Credit Union, Rabobank NZ, SBS Bank, the Co-operative Bank, TSB Bank, and Westpac NZ.
*The tables and chart below come from the Banking Ombudsman Scheme's annual report.
Cases by bank
Disputes outcomes
2 Comments
The average loss reported was $80,000, up from $57,000 last year.
These numbers are eye-catching. I feel NZ population in general is very vulnerable to scams since it hasn't historically been a common practice here, so most people are very trusting if compared to other countries. Sad to see such high numbers and so many impacted.
Worthless organization.
Paid for by banks, directed by banks, and controlled by banks.
Essentially a lip-service function to save banks money on complaints while ensuing the bulk of valid cases of involving bank malfeasance never gets to court.
... While ensuring laws passed by government are never enforced.
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