Complaints against banks at GFC low
The Financial Ombudsman Service said on Wednesday the number of disputes fell 11 per cent to 32,307 during 2012-13, bucking a steady upward trend since 2008-09.
Falling interest rates, changes to the banks' hardship programs, and new rules on flood insurance all helped drive the decline, the industry-funded umpire said.
In line with previous years, 70 per cent of disputes were resolved without the need for a ruling from the Ombudsman after customers reached agreement with their financial institution.
Home loans and credit cards were at the centre of most of the disagreements, and in each of these areas Macquarie had the highest dispute rates.
In mortgages, where it has been expanding, Macquarie averaged 285.5 disputes for every 100,000 customers.
The lenders with the next-highest ratios were mortgage manager Over Fifty Seniors Equity Release, with 252.5 disputes per 100,000 customers, and GE Personal Finance, with 244.1 disputes per 100,000.
Among the major banks, NAB had the highest ratio of disputes for home loans, with 74.7 per 100,000 customers.
Macquarie also topped the complaint list for credit cards, with 50.3 complaints per 100,000 customers.
Chief Ombudsman Shane Tregillis said a reason for the improvement was a 22 per cent fall in disputes caused by financial hardship. "This appears to be a result of improvements by the major banks and other financial service providers to their financial hardship programs over the past few years following changes introduced under the 2010 National Credit Code," Mr Tregillis said.
Lower borrowing costs also played a role. Official interest rates fell by 0.75 percentage points in the year to July, cutting repayments.
Disputes about insurance for natural disasters also fell significantly, a trend the Ombudsman said had been affected by the government's decision to introduce a standard definition for flood cover in June 2012.
But the Ombudsman said there had been a doubling in disputes about "maladministration in lending", which includes cases in which mortgage brokers put inaccurate information in home loan applications without the borrower's knowledge.
The Ombudsman said there had been increased media coverage of the issue in the past year.
Frequently Asked Questions about this Article…
Complaints against banks have decreased due to falling interest rates, improvements in banks' hardship programs, and new rules on flood insurance. These factors have contributed to a more stable financial environment for customers.
Banks have improved their financial hardship programs by making changes following the 2010 National Credit Code. These improvements have led to a 22% reduction in disputes caused by financial hardship.
Home loans and credit cards are at the center of most bank disputes. These areas often see disagreements between customers and financial institutions.
Among major banks, NAB had the highest ratio of disputes for home loans, with 74.7 disputes per 100,000 customers.
Lower borrowing costs, due to a 0.75 percentage point fall in official interest rates, helped reduce bank disputes by cutting repayment amounts for borrowers.
The introduction of a standard definition for flood cover in June 2012 led to a significant decrease in disputes about insurance for natural disasters.
'Maladministration in lending' refers to cases where mortgage brokers submit inaccurate information in loan applications without the borrower's knowledge. This issue has seen a doubling in disputes, partly due to increased media coverage.
Macquarie topped the complaint list for credit cards, with 50.3 complaints per 100,000 customers.
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