|
|
|
|
(1) Note: The contact details for most banks’ customer relations departments can be found in the "Members" section of the BFSO website: www.bfso.org.au |
|
(2) Note: The Code of Banking Practice can be downloaded from the BFSO website www.bfso.org.au under their "Publications" section |
Bank Rip-Offs Revealed - Click
for Video
This article contains 2 sections: Statistics and About The BFSO.
The Banking and Financial Services Ombudsman (BFSO - formerly the Australian Banking Industry Ombudsman) is a free mediation service with the purpose of resolving disputes between individual and small business customers and their banks. This service is generally accessible for disputes where the losses claimed are less than $150,000. If you have been overcharged or otherwise suffered financial loss due to your bank (see article: Banks Behaving Badly), you should first contact your bank’s Customer Relations Dept. to try to resolve the issue prior to lodging a complaint with the Ombudsman.
Analysing the statistics showing the dramatic increase in the number of complaints lodged with the banking ombudsman in recent years, and the categories to which they relate, can provide us with a tell tale indication of just how poorly Australian banks are now treating their customers and in what areas they are failing us.
The first table depicts the increase in the number of calls answered by the service between 1997 and 2002, with the second table showing the increase in the number of written complaints received by the service:
|
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
|
41,000 approx. |
45,000 approx. |
49,000 approx. |
55,000 approx. |
61,729 |
64,365 |
|
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
|
4,100 approx. |
4,800 approx. |
5,100 approx. |
6,200 approx. |
7,199 |
|
In 2000/2001, 7107 new cases were dealt with, an increase of 14.6% on the previous year. Across all product groups, Transactions and Calculations was the most commonly identified problem area, representing 28.7% of the problems reported. The next largest problem area related to Issues of banking practice (eg. breach of contract) which accounted for 23.1% of problems identified.
Of the 7992 new cases received in 2001/2002, 22.5% related to Housing Finance. This product group was in fact the main problem area investigated by the BFSO in 2001/2002, representing 31.4% of all investigations. Most complaints investigated were about variable rate home loan products, and the main problem described by consumers was that the bank had breached the terms of the contract. In the Consumer Finance product group, 8.2% of the disputes lodged with the BFSO relating to personal loans were for Calculation Errors.
One systemic problem identified by the Ombudsman in 2001/2002 related to the delay incurred when customers tried to transfer funds into their credit card accounts to either pay off their monthly balances or make minimum monthly payments upon those cards. When the transfers were effected at ATM’s, banks sometimes took up to 5 days to complete the transfer. This usually resulted in late fees being charged to the customer’s credit card account when, had the transfers been effected in a more timely manner by the banks, such late fees would not have been incurred.
As discussed, if you have been overcharged or otherwise suffered financial loss due to your bank (see article: Banks Behaving Badly), you should first contact your bank’s Customer Relations Dept.(1) to try to resolve the issue prior to lodging a complaint with the Ombudsman. Banks are subject to the Code of Banking Practice(2), which obligates them to follow a particular framework when dealing with a customer’s complaint, and to provide a resolution or conclusion to any dispute which is raised.
Should that resolution or conclusion prove unsatisfactory, you may then contact the BFSO. The BFSO will lodge your dispute with your bank if it is within their terms of reference. If the dispute remains unresolved after 30 days, they will assign a case manager to handle your dispute who will then liaise with the bank and yourself during the investigation. Disputes are generally resolved in a reasonable timeframe. According to the ABIO’s 2002 report, 40.8% of cases were closed within 60 days, with 79.5% being closed within 120 days. The majority of cases (88.8% in 2002) tend to be resolved by the banks themselves once the BFSO becomes involved. Failing that, the Ombudsman generally makes a finding, recommendation, or facilitates a negotiated settlement. The banks are bound to comply with any determination that the Ombudsman makes at the conclusion of a dispute.
It should be noted that should the customer accept a monetary settlement by their bank which has been obtained as a result of BFSO involvement, this will likely close the door on future court action. If you are not satisfied with the outcome and settlement amount at the conclusion of the BFSO process and are considering legal action, you will be best served by obtaining legal advice prior to accepting any financial settlement offered.
The Banking and Financial Services Ombudsman's contact details can be found in our "Valuable Resources" section under: Need to Lodge A Bank Complaint?
© Copyright 2003, Niche Mortgage Solutions Pty Ltd. All rights reserved. Copyright Information