Westpac scores most complaints

By PAULA OLIVER

Westpac kept the Banking Ombudsman busy over the past year, notching up more than twice the number of disputes of its nearest rival.

In a departure from usual practice, the Banking Ombudsman has revealed in its annual report the number of complaints received about each bank.

The unmasking would not sit comfortably with Westpac, which is well ahead of the pack, with 144 disputes. Westpac is the country's biggest bank.

Its nearest rival is ANZ, on 64.

Disputes are defined as a complaint that has been through a bank's internal complaints process without being resolved.

Banking Ombudsman Liz Brown said she had consulted extensively banks and other parties over the proposal to release the figures.

The consensus had been that it would improve transparency and accountability both for banks and the Ombudsman scheme.

She issued the figures with a cautionary warning.

Do not forget, Ms Brown urged, that banks with large numbers of customers might get more complaints.

Also, banks that promoted the Ombudsman scheme may get more.

In an interview with the Business Herald last week, Westpac chief executive Ann Sherry said she had worked hard this year to fix the bank's internal complaints process.

She had also targeted a better relationship with the Banking Ombudsman's office, and attempted to reduce the backlog of complaints there.

Overall the Ombudsman received 1228 complaints this year - slightly up on the previous year.

During the year just 10 complaints were upheld and 36 partly upheld.

Many were settled, not upheld, withdrawn, referred elsewhere, or deadlocked.

The most gripes related to investment advice customers received from banks.

The complaints typically arose when people suffered losses on bank-recommended managed funds, unit trusts or superannuation schemes.

Many protested that advisers had failed to give an adequate explanation of risks attached to investment in a fund with an equities component.

Ms Brown said that it was not unusual to find that a customer who had only ever dealt with term deposits suddenly had one meeting with an adviser and wrote a cheque.

"I consider it poor practice to accept an application to invest from an inexperienced investor unless he or she has had adequate time to read and assimilate the information," Ms Brown said.

She noted that the printed material supplied by the bank often met legal requirements, but the customer was not given time to read and understand it.

The Ombudsman's office, which is in its 11th year of operation, can award compensation to cover direct losses of up to $120,000.

It did not make a formal award of compensation this year, but the total amount paid by banks to customers who had complained to the Ombudsman totalled just over $750,000.

Debit and credit cards were second highest offenders, with complaints focused on fraud and the reluctance of banks to reimburse customers after fraud had occurred.

Problems with mortgages, and particularly the recovery processes of banks when a customer could not pay, rated third.

Westpac is the country's biggest bank, with over one million customers. ANZ is slightly smaller, with about 1.1 million.