Money Week: Insurance & Savings Ombudsman says keep asking questions and read carefully

15 October 2014

Money Week is a timely reminder to read your documents and keep asking questions, says Insurance & Savings Ombudsman Karen Stevens.

“A lot of the complaints we investigate could have been avoided if people had read and understood their documents, and if they’d had access to the right information,” says Karen.

Last year the ISO Scheme dealt with the highest number of complaints since 1998, with 3,215 complaint enquiries and 300 complaint investigations about insurance and financial services.

“We’re pleased more people are using a dispute resolution service to resolve their complaints,” says Karen. “The ISO Scheme is an independent and approved dispute resolution service, which is entirely free for consumers.”

All financial service providers in New Zealand must belong to a dispute resolution scheme. The ISO Scheme has over 4,000 members, which include providers of insurance, investments, loans and credit, superannuation, financial advice and foreign exchange.

Karen says the greatest number of complaints to the ISO Scheme still relate to insurance, with 62% of complaints relating to house, travel, contents and motor vehicle insurance; and 31% relating to health, life and disability insurance.

Although complaints about financial advisers only made up 2% of complaints last year, these complaints could be avoided with clear client communication and good processes, says Karen.

“Financial advisers include mortgage and insurance brokers, financial planners, and people working for insurance companies who give advice,” says Karen. “Complaints tend to be about the quality of advice, miscommunication, misunderstandings, fees and charges.”

“Again, we’d urge all clients of financial advisers to keep asking questions until you fully understand, and that includes asking your adviser about their fees and charges.”

5 tips for insurance and financial services customers:
1. Ask for an explanation of how financial products work, and read recommendations in full before making decisions on which one is right for you.
2. Keep asking questions until you fully understand what it is you are buying, including how much you are paying in fees and charges.
3. Always provide full, accurate information when applying for insurance.
4. Keep all documentation, including policy documents and letters.
5. Read all of your documents and ask questions so you understand what obligations you have.

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