Ombudsman ups bank claim limit to $350k

Banking Ombudsman Nicola Sladden has increased the claim cap from $200k to $350k. Photo / File

Banking customers who are found to have suffered a direct financial loss or damage through their bank will now be able to claim up to $350,000 through the Banking Ombudsman.

The dispute resolution scheme, which is free for the public to use, has lifted its claim limit from $200,000.

Until now the Banking Ombudsman had to turn away people with complaints over its cap unless the bank involved agreed for it to pursue the case.

Those with bigger claims had to go to the Disputes Tribunal.

Banking Ombudsman Nicola Sladden said the increase would provide more people with access to justice through the scheme.

"We want to ensure our dispute resolution service is available to as many bank customers as possible."

The scheme started with a $100k limit in 1992 which was increased to $120k for banking complaints in 2001 and $200k in 2006.

In the year to June 30, 2018 it had to knock back three cases because they were over $200k and so far this year one.

But Sladden said the number turned down was likely to be greater because the publicised limit may deter some individuals with claims near or above $200,000 from approaching it.

The claim increase comes as the banks are under increased scrutiny as a result of reviews by the Financial Markets Authority and the Reserve Bank of New Zealand, and the recommendations of the Royal Commission in Australia.

Sladden said the conduct and culture reviews in New Zealand and Australia highlighted the importance of complaints as an indicator that conduct may be falling below community expectations.

"People can, and should, come to us for an independent review when things go wrong."

The scheme received 3972 cases relating to banks in the year to June 30 - a 14 per cent rise on the prior year.

The scheme only handles complaints where customers have already failed to reach a resolution with their bank meaning it only sees the tip of the iceberg.

But Sladden said it was now working on a dashboard that would pull together complaints data from across the banks to give an industry wide view of the issues that cause problems and how widespread they are.

"This will enable us to highlight opportunities for the industry to improve customer outcomes."