General Forum

Kia ora koutou! As part of my mahi I sit on the Banking Ombudsman Consumer Advisory Group, catch up with the RBNZ and Commerce Commission and also some of people looking to improve the service of the banks they work for. I've got a few questions if anyone has a minute?

• I have heard of issues where clients start a debt spiral or get stuck in one because they end up in an unexpected overdraft with their bank. Are many hearing of this issue?
• I also hear very often and have personally complained to the Banking Ombudsman Scheme about banks (incorrectly) claiming they cannot cancel a direct debit as instructed by a customer. Is it fair for me to say this is an issue that financial mentors regularly hear about too?

If anyone is happy to reply either confirming that you are seeing this or not/ where you are getting stuck/ what has got through the issue/ with high level examples that you'd be happy for me to mention to these decision makers then please do! I'm also very keen to hear anything I can feedback on behalf of financial mentors or the whānau you are working with. If you'd rather not post it on a discussion board then my email is jake@fincap.org.nz or I am happy to speak with any financial mentor over the phone on 021 0236 3233 where it lines up. Thank you to all the financial mentors who have shared your insights with me before and to all of you for connecting the dots for your clients when things get super messy.

Hi,   Banks telling clients they cant cancel a DD is so problematic and has been for a very long time, I now send the client the consumer protection info sheet on this and tell clients they can use two words to the bank to get the DD cancelled - Banking Ombudsman. While this works every time, it is not something we as FMs should have to teach our clients or for them, through us, to have to educate the banking staff on their job.  So frustrating for us and worrying and intimating for the clients. Kiwibank seem to be the slowest IMO

Thanks Charlotte, reconfirming the issue is helpful. Unfortunately we get reassurances that issues have been resolved and then requests for new examples when that doesn't seem realistic. Really keen to quote the above when raising this issue again at the Ombudsman/ with banks/ with regulators, would that be okay? If so would you like it quoted as 'a Financial Mentor from Otago' or as you?

Yep, absolutely quote me.  I dont mind you using my name for this, or Otago FM - whichever you think best.  Whatever helps get the word through!

Kia ora Jake, "Other feedback on banks" - "All my eggs in one basket".  Is it right for customers to have all their financial affairs sitting with one bank? i.e. everyday banking, insurances and KiwiSaver to name a few products. I ask this because we have had clients come into the service for a Kiwisaver hardship withdrawal because their bank sent them.

Kia ora Irene, if you ever have an example of a bank pressuring someone to use their kiwisaver with the same bank as part of debt collection then it would be great to get it in front of the Banking Ombudsman(sorry to be a broken record!) and I'd love to help with a complaint to the FMA as it is simply the wrong thing today along with not consistent with the responsible lending code and a bunch of other requirements. I hear of this issue from mentors occasionally and will keep raising this. In terms of the question on all services with the same provider I have a range of whakaaro. This shouldn't be an issue in principle although it should be easier to 'shop around' for some in the future as the Government progresses initiatives like the 'Consumer Data Right.' It is likely that those who have had trouble with money will be price discriminated against and be credit checked out of the best deals most of the time of course. You'd hope that if a bank is offering a good rate for insurance to new customers they would also extend that to existing customers that are having trouble paying a loan otherwise but unfortunately that isn't often how the world works and why I'm hoping stuff like the fairness principle in the upcoming 'Conduct of Financial Institutions' reforms turn into solid changes. I really wish the default in our interactions with businesses providing what are often essentials was not getting ripped off but there is plenty of work on systemic issues to get stuck into.

Tēnā koe Irene, if you ever have an example of a bank pressuring someone to use their kiwisaver with the same bank as part of debt collection then it would be great to get it in front of the Banking Ombudsman(sorry to be a broken record!) and I'd love to help with a complaint to the FMA as it is simply the wrong thing today along with not consistent with the responsible lending code and a bunch of other requirements. I hear of this issue from mentors occasionally and will keep raising this. In terms of the question on all services with the same provider I have a range of whakaaro. This shouldn't be an issue in principle although it should be easier to 'shop around' for some in the future as the Government progresses initiatives like the 'Consumer Data Right.' It is likely that those who have had trouble with money will be price discriminated against and be credit checked out of the best deals most of the time of course. You'd hope that if a bank is offering a good rate for insurance to new customers they would also extend that to existing customers that are having trouble paying a loan otherwise but unfortunately that isn't often how the world works and why I'm hoping stuff like the fairness principle in the upcoming 'Conduct of Financial Institutions' reforms turn into solid changes. I really wish the default in our interactions with businesses providing what are often essentials was not getting ripped off but there is plenty of work on systemic issues to get stuck into.

Thanks so much for this Charlotte! https://www.consumer.org.nz/articles/banks-not-cancelling-direct-debits Just to reiterate forum rules - we'll always be checking it is okay before sharing outside the discussion.