JavaScript disabled. Please enable JavaScript to use My News, My Clippings, My Comments and user settings.

If you have trouble accessing our login form below, you can go to our login page.

If you have trouble accessing our login form below, you can go to our login page.

Customers not happy with banks

Date

Eric Johnston

Among the big banks, National Australia Bank had the highest ratio, with 66 disputes for every 100,000 customers.

Among the big banks, National Australia Bank had the highest ratio, with 66 disputes for every 100,000 customers.

Disputes between borrowers and their banks surged nearly 30 per cent last financial year, particularly after a series of natural disasters last summer put more customers at odds with their lenders.

Rising interest rates earlier this year also sorely tested relations with customers, with the number of disputes over home loans, credit cards and personal loans up sharply.

Disputes involving insurers spiked after the Queensland and Victorian floods and storms.

Disputes involving insurers spiked after last year's floods.

Disputes involving insurers spiked after last year's floods. Photo: Glen Hunt

The figures are contained in the annual report of the Financial Ombudsman Service, the government-backed umpire that attempts to resolves disputes between banks, insurers, financial planners and their customers.

Its report revealed that the financial industry paid a total of $3.6 million in compensation to customers affected by serious problems, such as being charged incorrect interest rates.

In the year to June 30, the Financial Ombudsman handled more than 30,000 disputes, up 27 per cent from the year before, continuing a run of increases in complaints for each of the past three years.

However, the report shows that more than 70 per cent of disputes were resolved by discussion between the lenders and customers, rather than needing a formal decision by the Ombudsman.

Non-bank lenders continued to top the list of disputes over mortgages. GE Money was the worst offender, averaging 434 disputes per 100,000 customers. RHG, which previously traded as Rams Home Loans, averaged 319 disputes.

Among the big banks, National Australia Bank had the highest ratio, with 66 disputes for every 100,000 customers.

Macquarie Bank topped complaints for credit cards, with 48 for every 100,000 customers.

Deposit products generate relatively few complaints, but HSBC topped the list, averaging 12 disputes for every 100,000 customers.

Despite the increase in the total number of disputes, the banking industry insists its relations with customers are improving. The Australian Bankers Association said the share of disputes handed by the Financial Ombudsman relating to financial difficulties was well below the banks' market share.

This was despite a period in which many customers were affected by extreme weather events and rising interest rates.

''The Financial Ombudsman data shows banks have managed these difficult circumstances very well,'' said ABA chief executive Steven Munchenberg.

34 comments so far

  • It is a cliche but the thing with cliches is that they are actually true.

    We decide to re-finance our mortgage and move it from the Common Wealth Back to Macquarie. Dates set and the pre work done so you would think. Unfortunately not and within days after settling on the new mortgage the Common Wealth Bank called to mention that we were behind on our payments and threatned with the police! It turned out to be their mistake and we asked for an apology in August.

    Needles to say we never heard a thing. Since then we have closed and moved all business with the Com Bank to other companies.

    Commenter
    Youpee
    Location
    Sydney
    Date and time
    December 13, 2011, 7:58AM
    • Looks like we're all giving the banks the finger in those graphs

      Commenter
      Give em the bird
      Location
      Sydney
      Date and time
      December 13, 2011, 8:11AM
      • Also, to the above posters, don't be surprised about the long waits with FOS. I had a case with them for nearly 2 years before they made a determination. They are under-resourced and will take up to 10 months to even assign a case officer to a complex complaint.

        Commenter
        Asynca
        Date and time
        December 13, 2011, 8:12AM
        • I am just sick and tired of all the fees that they charge. I wonder how many people actually check their bank statements. I got charged a Cash Advance Fee of $2.50 when I moved $10.00 from my Visa Account to my personal account when my Visa card went into credit. I complained and got a refund, but was advised that there would be no more refunds and a Cash Advance Fee would apply. Getting charged a fee to get my own money!!!!

          Commenter
          Tc
          Date and time
          December 13, 2011, 8:28AM
          • The only time I really needed the banks' "service" is when I wanted a better deal. Everything else was done online, self-service.

            Commenter
            LFL
            Location
            Melbourne
            Date and time
            December 13, 2011, 8:35AM
            • Currently got a disput over very poor customer service and bad handling of a mortgage payout on sale of an investment property with St George Bank. Financial Ombudsman has been handling the case for over a year now, no end in sight, they do not have resources to process disputes.
              St George bank is just sitting back hoping I will give up.
              FOS is saying it won't direct St George Bank to pay compensation for the poor service and no progress, they took funds without reason, no information as to how funds were dispersed on settlement, lied about what they told me on phone.
              St George Bank, it is not finished yet...

              Commenter
              Jim
              Location
              Canberra
              Date and time
              December 13, 2011, 8:38AM
              • Sounds aweful Tc.... same thing happened to me. I overdrew my account and they charged me interest.

                Almost as bad as the phone companies charging me 20c to make a call. Ridiculous I say.... life should be free and when I complain, i'm right.

                Commenter
                Tight
                Location
                Sydney
                Date and time
                December 13, 2011, 9:06AM
                • Interested to see NAB is top of the Big 4 in complaints. Amongst my clients the most complaints seem to be about the CBA. No surprises that GE is at the top; they'd lend money to a cocker spaniel if it could sign its name.

                  Commenter
                  Asynca
                  Date and time
                  December 13, 2011, 9:10AM
                  • Not happy with banks? Who is?

                    Maybe except the banker and its employee, most importantly their shareholders.

                    Commenter
                    Gerson
                    Location
                    Sydney
                    Date and time
                    December 13, 2011, 9:12AM
                    • I owned a business that had an overdraft at the Commonwealth which I was forced to VL. After 17 years of loyalty they made it so difficult to organise repaying the overdraft. Luckly I managed to the recover business. I would'nt touch Commonwealth again in a million years. Starting a business, find another bank.

                      Commenter
                      Socialy Weathless Bank
                      Location
                      Melbourne
                      Date and time
                      December 13, 2011, 9:29AM

                      More comments

                      Make a comment

                      You are logged in as [Logout]

                      All information entered below may be published.

                      Error: Please enter your screen name.

                      Error: Your Screen Name must be less than 255 characters.

                      Error: Your Location must be less than 255 characters.

                      Error: Please enter your comment.

                      Error: Your Message must be less than 300 words.

                      Post to

                      You need to have read and accepted the Conditions of Use.

                      Thank you

                      Your comment has been submitted for approval.

                      Comments are moderated and are generally published if they are on-topic and not abusive.

                      Featured advertisers
                      Money newsletter signup

                      Executive Style newsletter signup The latest news delivered to your inbox weekly.

                      Sign up now

                      Special offers

                      Credit card, savings and loan rates by Mozo