KEY POINTS:
Imagine shouting a large group of colleagues, friends and employees to Christmas dinner and then having your card declined.
That was the embarrassing scene Mr C faced when, as a result of a bank error, a hold was placed on his account without his knowledge.
His plight is one of a number of case histories outlined by Banking Ombudsman Liz Brown in her annual report issued yesterday.
The case histories are included with the report as examples of the types of complaints being made, and the way the ombudsman is dealing with them.
In the case of Mr C, what was supposed to be a celebration of his first year in business turned into tears.
When his card was declined he phoned the bank, but by that time it was late in the evening and the staff member he spoke to was not authorised to remove the hold.
Mr C was forced to ask his guests to pay for their own meals. He felt the evening had been a total disaster.
Unable to sleep that night, he continued, in his own words " ... thinking about that night and all the talking everyone will do behind my back even though they helped me out by paying for the bill".
Mr C went to the bank as soon as possible.
He said: " ... due to the stress I was in tears in front of the staff and other customers. I got sympathy from the customer service officer and was given a tissue to wipe my tears but inside myself I was in very deep pain."
The branch manager contacted Mr C and apologised for the error but said he was unable to offer any compensation for the stress.
Mr C complained to the bank and was offered $100 in compensation for inconvenience.
He then complained to the Banking Ombudsman and Ms Brown said her investigator contacted the bank again.
"The bank accepted that Mr C had experienced significant stress and embarrassment because of this incident, and immediately offered $2000 in compensation.
"Mr C accepted the proposed settlement, and the matter was resolved within 15 days of being referred to my office," Ms Brown said.
Other cases highlighted included various unauthorised withdrawals on Eftpos and credit cards.
They included cards being stolen from a man on an overseas trip and used for unauthorised withdrawals totalling more than $5000.
In that case Mr P was reimbursed $3700 for the loss on his Visa card.
"However, because, on the balance of probabilities, it was quite likely that Mr P had breached the conditions of use relating to the Eftpos card, I found that the bank was not liable to reimburse him for the loss of that card," Ms Brown said.
In the case of Mrs L she found that an unknown person had been making unauthorised ATM and Eftpos withdrawals from her account.
More than $3500 had been withdrawn over a six-week period, but Mrs L said she had never disclosed her PIN to anybody, and that her card had been in her bag at all times.
She said she did not know when the funds first began to be taken as she had not received any bank statements.
The bank and the police investigated and video surveillance footage of one of the unauthorised transactions show a youth resembling Mrs L's son withdrawing money from an ATM.
"Although the police concluded that Mrs L's card had been used by a family member, there was no evidence of this apart from the surveillance tape, which was not of good enough quality to make a positive identification," Ms Brown said.
The bank declined to reimburse Mrs L for the full amount she claimed to havelost.
It said the disputed transactions were interspersed with her legitimate transactions; some of the disputed transactions had been immediately preceded by balance enquiries; all of the transactions had been completed on the first use of the PIN; Mrs L did not report the card as lost or stolen; and the bank had received no reports about "card skimming" at ATMs in Mrs L's area.
The bank did offer Mrs L a goodwill payment of $1000, which was declined.
Ms Brown said the case was unusual in that the withdrawals occurred over an extended period of time.
"In nearly all cases that I investigate involving the unauthorised use of a card and PIN, the card is stolen, and the thief then immediately uses it to withdraw funds from the account," she said.
Although Mrs L did not make the disputed withdrawals, the offender had ready access to Mrs L's card, removing it from her bag on several occasions.
"It would seem almost certain that the offender or an accomplice was known to Mrs L, and could have been a member of her family," Ms Brown said.
She said that in the unique circumstances of the case, it seemed the fairest solution was for the bank and Mrs L to share equal responsibility for Mrs L's loss.
- NZPA
Case studies
* Mr C: Humiliated in front of dinner guests because his card was wrongly declined when he tried to pay the bill. Paid $2000 in compensation.
* Mr P: Card stolen during an overseas trip and more than $5000 withdrawn. Only partly reimbursed, because he was partly at fault.
* Mrs L: Bank claimed the "unknown person" who withdrew $3500 from her account was her son. It agreed to pay half her loss.
10,000 complaints speedily resolved
Banking disputes are being resolved faster but many people still don't know how to make a complaint, says Banking Ombudsman Liz Brown in her annual report.
Ms Brown, Banking Ombudsman since 1995, said her office had taken steps to maximise the speed and efficiency with which complaints were handled. "Despite a 43 per cent increase in investigations commenced, the time taken to resolve complaints has decreased," she said. "The closure of the 10,000th case file during the year illustrates the considerable volume of complaints that are formally settled by the office, although many more enquiries and complaints are resolved informally."
Ms Brown said banks had continued to improve and refine their complaints processes, with the great majority of cases being "sensitively handled and resolved".
But she said far too many bank staff and customers still lacked an understanding of banks' internal complaints processes, including the role of the Ombudsman.
"The Banking Ombudsman is successfully extending the scheme's community outreach to sectors that, until now, have been under-represented among complainants."
Ms Brown said the Code of Banking Practice had grown in length and complexity, and needed review to make it "easier to understand and more accessible to the public".
