What the disputes are about
|
BFSO classifies all cases according to:
|
- The product or service obtained by the consumer; and
- The problem with the product or service as reported by the consumer.
|
Every case involves at least one product and for each product recorded there is at least one problem. Some cases will involve multiple products and for each product there may be multiple problems. Appendix C is the full list of products and problems used in BFSO classification.
The figures in this section are derived from all cases closed after referral to a member. This excludes cases that were determined to be outside Terms of Reference or were discontinued prior to referral to a member.
|
Product categories
|
Products are classified into one of seven broad categories. Click here to view graph.
|
During the reporting period, there were 4,805 products recorded in respect of the 4,495 cases closed after referral to a member. Appendix C lists the products in each product category.
As in the previous five years, Consumer Finance (37.5 per cent) was the top product category in disputes this year. The other main product categories were Payment Systems (17.8 per cent), Deposit Accounts (16.3 per cent) and Housing Finance (16.2 per cent).
|
Problem categories
|
Problems are classified into one of eight broad categories. Click here to view graph.
|
During the reporting period there were 5,844 problems recorded in respect of the 4,495 cases closed after referral to a member. The graph shows the distribution of problem categories. Appendix C lists the problems in each problem category.
Across all product categories, Transactions and Calculations was the most common problem identified by consumers, representing 21.8 per cent of all problems recorded. This problem category includes disputes about unauthorised transactions, calculation errors and withdrawal and deposit errors.
The second ranked problem category identified by consumers was Commercial Decision. Problems in this category relate to whether a member has made a commercial decision, which it is entitled to make, or whether, in fact, it has acted contrary to the terms of a contract or a duty owed to the consumer. This category accounted for 16.5 per cent of problems identified and includes disputes about the rejection of a credit application, dishonoured transactions, maladministration in granting credit and maladministration in debt recovery.
Issues of Industry Practice, such as a breach of an oral or written contract or unilateral action by the financial services provider made up 15.8 per cent of problems identified.
|
Comparing product categories.
|
Click here to download a printable PDF detailing the broad financial product categories. The piecharts are displayed in descending order according to the number of cases involving a dispute about the product category. The tables show the proportion of disputes involving discrete financial product groups within the broad categories.
|
Linking problems with product categories
|
Click here to download a printable PDF listing the broad product categories and the three main products identified in each category.
|
For each of the products, the two most frequently described problems are listed. The percentage figure represents the number of times the particular problem was recorded for that particular product. For example, in the case of credit card disputes, 12.5 per cent of all problems relating to credit cards were about unauthorised transactions and 9.2 per cent were about fees charged. The low percentage for the two top problems (21.7 per cent) indicates that the problems experienced with credit cards were across the whole range of problems classified by BFSO. By contrast, the two main problems with ATMs, cash dispensing problems (47.6 per cent) and unauthorised transactions (36.7 per cent), accounted for 84.3 per cent of all
problems identified.
|
Products and problems in disputes resolved at an early stage and disputes resolved after investigation
|
The profile of product categories and problems identified in investigation cases differs from the profile in cases resolved at an early stage. Click here to view a table which shows the relative representation of different product categories in disputes closed at an early stage compared to cases closed after an investigation.
|
Back to top
|
Housing finance
|
Housing finance was the fourth ranked product category in cases resolved at an early stage (15.3 per cent), with the main problem being delays in loan processing. However, in cases closed after investigation, housing finance was the predominant product category recorded representing 27.8 per cent of all closed investigations. Disputes about housing finance tend to predominate at the investigation level because they involve complex legal and banking issues and the value of the loss claimed is high.
|
Consumer finance
|
The consumer finance category was the predominant product category in the early resolution cases (38.4 per cent) and the second ranked product category in investigation cases (26.0 per cent). In cases closed after investigation, the main problem identified by consumers was maladministration in lending. Most disputes about maladministration in consumer finance lending are about the provision of credit when there was no capacity to repay the credit.
|
Business facilities
|
It is interesting to note that disputes about business facilities comprise 7.5 per cent of early resolution cases and 20.5 per cent of investigation cases. Some of these disputes are not readily resolved and require investigation because of the complexity of the disputes or the entrenched positions of the parties.
|
