Despite a year of more COVID-19 disruption, increased service delivery legislation and big weather events, Karen Stevens, Insurance & Financial Services Ombudsman (IFSO), says there was an overall drop in the number of complaints accepted by the IFSO Scheme. There were 2,847 complaint enquiries from consumers who were dissatisfied with their financial service providers, down from last year’s total of 3,626. Similarly, only 10% of those resulted in 285 complaints, with more than $1.2m paid to consumers.
With evidence of fewer complaints about insurers this year, it’s possible to link the improved conduct with the increase in financial markets legislation and focus on the customer. “It’s pleasing to see the financial services industry is working hard to resolve issues with customers before they escalate to complaints. This is a good outcome for consumers. We see a high level of compliance and goodwill from the sector. It’s especially good to see this, given the growth in climate change-related extreme weather events and a greater likelihood of more property damage claims as a result.”
In the credit sector, the IFSO Scheme has reported several lenders to the Financial Markets Authority (FMA), under a statutory requirement that a Participant must be referred to the FMA if it contravenes any financial markets legislation.
“This mandatory reporting acts as additional security for consumers and can identify systemic issues earlier.”
Stevens says it’s also pleasing to see the strong involvement of financial mentors in credit-related issues. She said they are serving communities well, providing advocacy where poor lending practices are putting consumers into hardship. Stevens says the IFSO Scheme, together with other Dispute Resolution Providers, has been contributing to an initiative to upskill financial mentors.
“Financial mentor groups such as FINCAP and CAP (Christians Against Poverty) are highly active in bringing enquiries and complaints from people having trouble repaying their loans. The efforts of these and similar free service community-based groups make a world of difference to New Zealanders who struggle financially and need help.”
After 27 years of operation, the IFSO Scheme has dealt with 72,928 complaint enquiries and investigated 7,625 complaints.
“We’ve been providing a dispute resolution service to insurers and other financial service providers for a long time and have built up a wealth of knowledge and experience for both Participants and consumers.”
Stevens says her message to consumers purchasing insurance has not changed over the years: “Consumers must be sure they are buying the cover they need. Policy exclusions and misunderstandings are still catching too many people out. I urge consumers to carefully read and understand what they are buying. They need to ask if they’re not sure what the policy covers or doesn’t cover. No question is a silly question”.
“Additionally, consumers need to check their annual insurance renewal information. Insurance is not something that you can change when a claim is made. What you arrange at the start is what you will have when you want it to respond, so you really do need to know what you’re buying.”
The Annual Report includes real case studies - from complaints against financial advisers, a Trade Me scam, claim dishonesty and claims for pre-existing damage.
The top 5 complaint enquiries were related to:
Motor vehicles
House
Credit Contracts
Life
Contents
The top 5 complaint issues were
Scope of cover
Policy exclusions
Mis selling/misleading information/misrepresentation
Non-disclosure
Prima facie claim
Our service is independent, fair, and free for consumers. Call 0800888202, or contact us on our website.
Call Rachel Kitteridge 0275558585 or email rachel@ifso.nz for further questions