Awareness of financial complaints service still too low

Awareness of financial complaints service still too low says FSCL CEO

Despite a massive 84% jump in the number of enquiries and complaints to dispute resolution scheme Financial Service Complaints Limited (FSCL), its Chief Executive Officer Susan Taylor says many complaints are still not getting through.

FSCL’s Annual Report for 2013/2014, released this week, shows it handled over 3,000 consumer enquiries and complaints about financial service providers to the end of June, up from 1,708 the previous year, and formally investigated 202 cases, a 24% increase.

“While these results indicate more and more consumers are coming forward with issues about their financial services providers, awareness of the dispute resolution regime remains worriyngly low.”

In the report, Ms Taylor says more has to be done to ensure that consumers know there is somewhere they can turn if they have a problem with their financial service provider.

“First and foremost, providers need to be willing to tell their customers what they are entitled to. That’s access to a free, independent, third party view on a situation that may be causing significant financial and emotional stress.”

Ms Taylor says that in over half the cases they’d dealt with since the start of the year, complainants weren’t told about FSCL by their financial service provider.

“We need that to change. Providers need to recognise that offering their customers access to a free and independent dispute resolution service is a real marketing tool. It’s something they should be actively promoting – on their websites, in customer statements, in phone messages.

“It’s not about trying to drum up complaints. It’s about giving consumers greater confidence in financial services which ultimately benefits the industry, consumers and the economy.”

In the report, Ms Taylor acknowledges the dispute resolution schemes must also act to raise their profiles with consumers and doing so was a priority in the year ahead.

Of those consumers who had come forward, the issues remained similar to those seen in previous years, with consumer credit and travel insurance each accounting for around 20% of the cases FSCL investigated.

“We are optimistic the Responsible Lending Guidelines and Code which come into effect next year will provide helpful guidance as to what is considered appropriate behaviour by lenders,” Ms Taylor says.

She reminded consumers taking out personal or other loans to take time to read and understand the contract before signing and not feel pressured to sign “on the spot”.

The report notes that most of the insurance complaints FSCL received related to travel insurance and indicated many consumers do not read or check their policies before travel to see exactly what events they are covered for, and the limits to cover.

“It is really important travellers disclose as much as they can about their medical history before buying insurance cover. And look out for age, time and value limits on your cover, or you could face expensive consequences,” says Ms Taylor.

FSCL’s Annual Report 2013/2014 will be available on its website at http://www.fscl.org.nz/publications-financial-services

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