Dealing with financial disputes - Diana Clement

If you feel you've not been treated fairly, seek an independent review. Photo / 123RF

Diana Clement is a freelance journalist who has written a column for the Herald since 2004. Before that, she was personal finance editor for the Sunday Business (now The Business) newspaper in London.

OPINION

New Zealand’s financial dispute resolution services hear thousands of complaints a year, where consumers have often lost money. Not all are resolved in the consumer’s favour, and many of those cases are timely reminders to consumers of buyer beware.

The Banking Ombudsman Nicola Sladden has her work cut out with more than 500 complaints in 12 months. The explosion of scams and the huge losses by often vulnerable individuals should be a timely reminder to every Kiwi. No one is immune.

Another common area of complaint is couples banking. Often one member of the couple is unaware of what’s happening financially. In one case released recently by the Ombudsman bank customer Gwyneth admitted she only discovered her husband had a $400,000 gambling problem after he died. She hadn’t seen their joint account statements for years. She complained that the bank should have detected the gambling pattern and alerted her to that and an address change for statements. The complaint was not upheld.

Most real estate sales go without a hitch. But now and again agents are inept or dishonest, or buyers often fail to read or understand the paperwork they’ve signed. Buyers need to do their due diligence [checks] and get their lawyer involved early in the transaction. A penalty decision by the Real Estate Authority was released recently for a case involving agent Zhen (Yoyo) Lui who failed to tell a buyer that a building consent had not been lodged for the property she was selling. It was costly for the buyer who found out too late.

Loans can lead to people losing their homes. Financial Services Complaints Limited, an Ombudsman service, heard a case where a self-employed builder “Richard” fell into arrears and the lender put caveats over his family home and another property. Because it was a business loan, which many sole traders take out, it was not covered by the responsible lending provisions of the Credit Contracts & Consumer Finance Act (CCCFA). “The responsible lending obligations in the CCCFA only apply to consumer loans,” said Financial Ombudsman Susan Taylor. “Many small business owners have put their family home on the line to build up their business, so the stakes are so much higher.”

Financial Dispute Resolution Services (FDRS) operations manager Jeanie Robinson recommends following up calls with a quick email confirming what was agreed in a phone conversation. That can help in a dispute and back up your claims. It’s good advice that could have prevented a case highlighted by Telecommunications Dispute Resolution, which is run by the same parent company. That warned that consumers often have no record of sales based on oral calls and conversations, which can mean there is little or no evidence down the track if needed to support or defend a dispute.

ACC often pays for initial treatment after an accident, but sometimes declines follow-up care. Fairway Resolution handled one such claim where it sought more medical information, which led to the original ACC decision to decline being overturned. “This is a common type of case that we see, where the longer-term impacts from an injury need to be unpacked,” said Blair Wadams, operations manager at Fairway.

Fraudulent insurance claims often backfire, and the consequences can be life-changing. In one case heard by the Insurance & Financial Services Ombudsman, “Mr Green” admitted that he had lied to his insurer. He requested to withdraw the claim, but it was too late. The real lesson was that he had shown himself to be dishonest and his name was added to the Insurance Claims Register. That means he will unlikely be able to get insurance again, which in turn could mean he will be unable to get a mortgage or borrow to buy a car on finance because both require the property or car to be insured.

The overwhelming message from these cases is to do your research, read the fine print, and seek an independent review if you feel you have not been treated fairly.