Fewer complaints accepted by the Insurance and Financial Services Ombudsman

Despite a year of further disruption related to COVID-19, increased legislation on service delivery and major weather events, Karen Stevens, Insurance and Financial Services Ombudsman (IFSO), says there has been an overall decline the number of complaints accepted by the IFSO programme. There were 2,847 complaint inquiries from dissatisfied consumers with their financial service providers, down from last year’s total of 3,626. Similarly, only 10% of these resulted in 285 complaints, with more than $1.2 million paid out to consumers.

With evidence of fewer complaints against insurers this year, it is possible to link improved conduct to increased capital markets legislation and customer focus. “It’s nice to see that the financial services industry is working hard to resolve issues with customers before they escalate into complaints. This is a good result for consumers. We are seeing a high level of compliance and goodwill from the industry. It’s especially pleasing to see this, given the growth in extreme weather events related to climate change and a greater likelihood of more property damage claims as a result.

In the credit sector, the IFSO regime has reported several lenders to the Financial Markets Authority (FMA), under a legal requirement that a participant must be referred to the FMA if they contravene securities legislation. financial markets.

“This mandatory reporting acts as additional safety for consumers and can identify systemic issues earlier.”

Stevens says it’s also nice to see the strong involvement of financial mentors in credit-related matters. She said they serve communities well, providing advocacy where poor lending practices put consumers in trouble. Stevens says the IFSO program, together with other dispute resolution providers, has contributed to an initiative to develop financial mentors.

“Financial mentor groups such as FINCAP and CAP (Christians Against Poverty) are very active in collecting inquiries and complaints from people who are having difficulty repaying their loans. The efforts of these free service and similar community groups are making all the difference to New Zealanders who are struggling financially and need help.

After 27 years of operation, the IFSO program has handled 72,928 complaints and investigated 7,625 complaints.

“We have a long history of providing a dispute resolution service to insurers and other financial service providers and have accumulated a wealth of knowledge and experience for participants and consumers.

Stevens says his message to consumers buying insurance hasn’t changed over the years: “Consumers need to be confident they’re buying the coverage they need. Political exclusions and misunderstandings still attract too many people. I urge consumers to read carefully and understand what they are buying. They should ask if they are unsure what the policy does or does not cover. No question is a silly question”.

“In addition, consumers should verify their annual insurance renewal information. Insurance is not something you can change when a claim is made. What you organize initially is what you will have when you want him to respond, so you really need to know what you are buying.

The annual report includes real case studies – complaints against financial advisers, a Trade Me scam, dishonesty claims and claims for pre-existing damages.

The 5 main complaint requests concerned:

  • Motor vehicles
  • Accommodation
  • Credit agreements
  • Life
  • Contents

The top 5 complaint issues were

  • Scope of coverage
  • Policy exclusions
  • Erroneous sale / misleading information / false statements
  • Non-disclosure
  • Prima facie claim

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