Banking Ombudsman News

Banking Ombudsman News

In this issue
• It's the putting right...
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• A good outcome for all
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• Mystery shopper 2012
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• New faces at BOS

Other news
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Wednesday May 23, 2012

It's the putting right...

Unfortunately, not many people make complaints. Some research shows that only one person in 200 affected by a problem will actually take their complaint to a dispute resolution service. Making a complaint takes time and it can be stressful having to relive what caused the complaint in the first place. But the outcome can be worthwhile for both complainants and the wider public.

The cases we investigate often have benefits for all customers as well as the person who originally complained.

Because of this potential to lift standards of customer service we look carefully at all complaints that come to us. When we first receive a complaint we ask ourselves whether other customers may have been affected or whether the same problem could happen again.

We then address both the individual and the wider issue. A recent case we have resolved illustrates this really well. I share this with you below

We also want to help prevent complaints from happening in the first place. So when something goes wrong, we ask ourselves whether other customers would know about how things work. We base our Quick Guides on these issues. We'll soon be publishing a new Quick Guide on Contactless Payments, so keep an eye on our website, or like us on facebook for a heads up.

Of course knowing what to do if you have a problem is a big part of the issue. Every year we survey how well our participants are letting customers know what to do if they have a problem, including how to complain to their banking service provider, and how and when to come to us. You can read more on this year’s survey below.

Deb Battell

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A good outcome for all

The following case demonstrates how we can get good outcomes for both individual complainants and the wider public. It also shows how banking service providers can play an ever greater role in the fight against fraud.

Mrs L advertised her car for sale. Mr J took the car for a test drive and agreed to buy it for $6,000. He said his mother would transfer the money to Mrs L’s account that night. However, instead of arranging the transfer, he presented a cheque for deposit into Mrs L’s account the next day.

The bank teller was suspicious as Mr J was paying someone else’s cheque into another person’s account, and was unable to provide proof of his identity or Mrs L’s full name. She accepted the cheque but followed Mr J and noted his car registration. The teller then put a note on Mrs L’s account that she suspected the cheque was stolen and to proceed with caution.

Mr J returned to Mrs L’s house and told her his mother had transferred the money as agreed. Mrs L phoned her bank to check the deposit had been made. The call centre operator confirmed that $6,000 has been paid into her account.
Mrs L then gave Mr J the keys and he drove away. Mrs L didn’t know the money hadn’t cleared as she didn’t realise Mr J had paid by cheque. The cheque was subsequently dishonoured.

Mrs L complained to us that she would not have given Mr J the car if the bank had given her adequate advice about the deposit and told her of its suspicions.

The bank maintained that it didn’t have to warn Mrs L that the money had not yet cleared because she only asked whether the money had been deposited, not whether it was available. The bank also said it didn’t have to convey its concerns about the cheque even though it confirmed that the call centre operator would have read the bank teller’s warning on the system when Mrs L called.

We upheld Mrs L’s complaint.

When customers ask if a deposit has been made to their account, they want to know if those funds are available to use. The duty in this case was even higher as the call centre operator would have known about the potentially fraudulent nature of the cheque. While the bank may not have wanted to share its suspicions, it needed to warn Mrs L that the funds were not available and that it was possible the cheque would not clear.

Thanks to the actions of the bank teller, the police were able to track Mr J down. He was later convicted and ordered to pay Mrs L $6,000 in reparation.

When considering compensation, we took into account the fact that Mr J had not yet made any reparation payments. We recommended that the bank pay Mrs L $6,000 but that she assign her rights to the reparation so the bank would receive any payments Mr J made.

Both Mrs L and the bank agreed. The bank has also subsequently made changes to its procedures.

Mystery shopper 2012

The measure of true customer service is how banking service providers react when something goes wrong. Our annual mystery shopper survey looks at how well banking service providers are helping their customers deal with complaints.

This year we visited 336 branches, covering 14 participants, five of which were surveyed for the first time. It was the first survey to expand beyond banks to include non-bank deposit-takers.

Ensuring that customers receive excellent service from branch staff about complaints is an important element of customer service, which may prevent complaints from snowballing. We were particularly concerned therefore to see a drop in how willing branch staff were to help customers with complaints. Year on year, overall standards have slipped with average ratings falling from 8.2 to 7.5 in the last year. This must influence perceptions of the banking industry.

Here are some of the other results:

2012 2011
Internal complaints process leaet on display 80% 76%
BOS leaet on display 87% 79%
BOS mentioned without prompting 50% 51%
Branches with Code of Banking Practice on display 52% 61%
Average branch staff knowledge of internal complaints 6.6 6.8
process (score out of 10)
Average willingness of staff to help (score out of 10) 7.5 8.2

So what is best practice? From our survey, the best performers and their branch staff:

• had leaflets on their own internal complaints process and the Banking Ombudsman Scheme in every branch
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• had the Code of Banking Practice available in over 75% of branches
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• were knowledgeable about the internal complaints process and the Banking Ombudsman Scheme
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• mentioned the Banking Ombudsman Scheme in every branch
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• excelled in their willingness to help customers with complaints.
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We hope to see some big improvements next year. We’re encouraging all our participants to:

• ensure their complaints leaflets are current, available and visible
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• provide refresher training for frontline staff on the complaints process, including who we are and what we do
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• include links to the Banking Ombudsman Scheme on intranets
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• include Banking Ombudsman Scheme leaflets in staff induction packs
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• ensure that branches have the Code of Banking Practice on display.
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New faces at BOS

We welcome a number of new staff to our team (from left to right) :

• Elaine Lai as Administrator. Elaine first temped for us early last year but moved to Melbourne until we succeeded in our persistent attempts to lure her back.
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• Angela Fearon as Investigator. Angela has a law degree She comes to us from New Zealand’s leading intellectual property law firm. She is currently studying to become a registered Patent Attorney. Angela joined us having realised that she really wanted to work in dispute resolution. She is covering Kylie Stratton who is on maternity leave
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• Penny Skinner as Enquiries Adviser. Penny is a recent law graduate and shifted back to Wellington from Christchurch last year. Penny originally wanted to be a dancer but has chosen to enter the family business: her mother works at the Parliamentary Ombudsman’s office!
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• Elaine Richardson as Finance Manager. Elaine is a chartered accountant, mad runner and cyclist. She replaces Alan Westbury who has moved to the Wairarapa to be a full-time farmer.
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ends

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