The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) is observing its 30th year in operation, with figures showing consumer complaints are at their highest level to date.
Since being established in 1995, the scheme has managed more than 86,000 cases involving insurers, financial advisers, and other providers.
Karen Stevens, who has served as ombudsman since 1998, said the organisation’s focus has not shifted over the years.
“Our purpose hasn’t changed in three decades – to provide a dispute resolution service that is independent, fair, accessible, and free for consumers,” she said.
Originally known as the Insurance & Savings Ombudsman Scheme, the service launched with 62 insurer participants. Membership expanded significantly after legislative changes in 2008 required all financial service providers to belong to an approved scheme.
By 2014, membership exceeded 4,300 entities. Insurance remains the leading source of complaints.
The scheme’s compensation cap has steadily increased, enabling larger disputes to be handled.
It rose from $100,000 in 1995 to $500,000 under new regulations in 2024. This has allowed more complex, high-value claims to be resolved through the service at no cost to consumers.
Complaint volumes tend to rise sharply following major events. After the Christchurch earthquakes, the scheme dealt with a decade-long surge in claims.
More recently, in 2023, complaints increased 45% in the wake of Cyclone Gabrielle and the Auckland Anniversary floods, with delays and service issues being the most common concerns.
In the year to June 30, 2025, the scheme received 4,293 approaches from consumers and accepted 600 disputes for investigation – a 25% increase on the prior year and more than double the 2022 total.
Stevens noted that more disputes are reaching the scheme because consumers are not always satisfied with the outcome of their insurer’s internal review process.
Of the cases investigated, 67% related to general insurance products such as house, contents, motor, and travel policies.
Life, health, and disability complaints accounted for 29%, with the remaining 4% concerning credit and other financial services.
House insurance disputes made up nearly a quarter of all complaints, with motor vehicle at 19% and travel at 18%.
The Financial Services Complaints Limited (FSCL), another approved dispute resolution service, also reported elevated complaint levels.
For the year to June 2025, FSCL received 1,469 complaints, slightly higher than the 1,426 lodged the year before and nearly twice the number recorded five years earlier.
Lending was the most common issue raised, while disputes involving advisers and insurers also made up a significant proportion.
The IFSO Scheme will hold its 30th anniversary conference in Auckland on Sept. 2.
Stevens said the milestone reflects the scheme’s longevity and accumulated experience.
“The IFSO Scheme has been here through good times and bad, providing a free service to those consumers who have needed it,” she said.
