The Insurance and Financial Services Ombudsman (IFSO) has received fewer complaints in the year ended June 30, despite massive COVID-19 disruption, increased service delivery legislation and severe weather events.
According to IFSO Karen Stevens, there were 2,847 complaint enquiries from consumers who were dissatisfied with their financial service providers, down from 3,626 in the previous period. From the enquiries, 285 progressed to formal complaints, or a rate of roughly 10%. A total of $1.2 million was paid out to consumers.
The top five complaint enquiries were related to motor vehicles, homes, credit contracts, life insurance, and contents insurance.
The top five complaint issues were scope of cover, policy exclusions, mis-selling/misleading information/misrepresentation, non-disclosure, and prima facie claims.
The IFSO linked the decline in complaints to improved conduct of financial service providers, due to the increase in financial markets legislation and improved 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,” Stevens said. “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.”
Stevens hailed the contributions of financial mentor groups such as FINCAP and Christians Against Poverty, which are 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,” Stevens said.
With regard to insurance, Stevens said that consumers must be sure they are buying the cover they need and to always check the terms of their insurance when renewing the policies.
“Policy exclusions and misunderstandings are still catching too many people out,” Stevens said. “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”.
Over its 27 years in 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 said.