Many consumers are unaware free help is available when they have a complaint about a financial service, the FSCL financial ombudsman says.
A recent study by the Financial Markets Authority found a third of consumers had a problem with their financial provider over the past year with underperforming investments, unexpected fees or charges and poor customer services topping the list of complaints.
Financial Services Complaints (FSCL) financial ombudsman and chief executive Susan Taylor said the service was designed to be easy for consumers to use but many were unaware it existed.
Financial service providers were required to include information about the dispute resolutions service on consumer contracts and tell consumers about it when they make an initial complaint but some do not, Taylor said.
“It’s really important for people to come forward if they feel they’ve been treated unfairly or perhaps charged an unreasonable fee, or might feel there’s been a breach of the law because sometimes it won’t just be affecting them.
“Unless people come forward with those issues, we won’t know that there’s a wider problem out there, which we would then be referring to the appropriate regulators.”
Despite the availability of free assistance offered by Financial Services Complaints just 5 percent of consumers had ever made a complaint about financial services, while a further 7 percent wanted to make one but did not.
The top reason for not making a complaint was a perception it would be ineffective (33 percent), nearly as many (29 percent) did not know how to complain and about a quarter (24 percent) thought the process would be difficult.
More than half (56 percent) of those who did lodge a complaint felt it was resolved to their satisfaction, while nearly three in 10 did not (31 percent) and the rest could not recall.
“I think that some people think that if they complain, they’re going to have to send in a whole lot of documents or write a long email, or even talk to us at length. But that’s not necessary. We will do the work for them and make the process as easy as possible,” Taylor said.
The service could award compensation of up to $350,000 to consumers with most in a range of $5000 to $20,000.
“And the (financial service) advisor has to pay it because there is no right of appeal, so that’s a worthwhile remedy,” Taylor said.
Story Credit: rnz.co.nz