A man who left his job because of Covid-19 vaccine requirements, and later fell into significant arrears on his home loan, has been awarded $500 in compensation from the bank.
By Susan Edmonds for RNZ
The man complained to the Banking Ombudsman, one of 283 disputes it investigated in its most recent financial year.
It said the man bought a house in 2022 with a bank loan, but left his job later that year because of a vaccine requirement. He survived on savings for a few months and then started a consultancy business.
But by the next year, he was struggling financially. He asked the bank to align his repayments with his monthly invoicing, which it did.
In April 2023, he stopped making payments and was in arrears.
He asked to be changed to interest-only payments, but the bank did not respond. He repeated the request in August and was asked to complete a statement of position, which he did not.
He contacted the bank in November 2024, but the bank did not respond. In January last year, he entered a repayment arrangement, but did not stick with it.
The bank said it would be willing to consolidate the arrears into his loan if he could make on-time repayments for three months, but by February he had not made any payments.
The man said the bank had not given him sufficient support. He did not want the bank to stop working on his complaint, but it said it was deadlocked and referred it to the ombudsman.
The ombudsman looked into the case and said, by the time he told the bank about his circumstances, he had been in default for more than two months, so he was not able to apply for hardship support under the Credit Contracts and Consumer Finance Act.
"Despite this, the bank still had an obligation to treat him in a reasonable and ethical manner when he failed to meet his loan repayments. We considered that it had mostly done so… however, elements of the bank's service were inadequate. [He] twice contacted the bank but received no response. The bank also omitted some of the personal information he requested. Even so, these failings had no tangible impact on his financial situation."
It recommended $500 compensation for the communication failures.
The bank has issued a notice that it will sell the house if the arrears are not paid.
Banking Ombudsman Nicola Sladden said the number of complaints in the 2025/26 year was up 26% on the year before.
Lending disputes were up 59%, which she said reflected the financial pressure that many people were under.
Financial hardship was a factor in 20% of cases.
A spokesperson said the increase in lending cases reflected challenges customers had keeping up with loans they had had for some time, particularly when their circumstances had changed.
Sladden said people were increasingly using AI tools to understand their rights and prepare their complaints. "These tools are giving users the confidence to pursue their complaints as far as possible."
The scheme awarded $1.3 million in compensation in the year
Big banks had the largest percentage of dispute cases. ASB had the most, at 18.8% of cases and 18% of the market. ANZ was next, at 18.3% but it had 28% of the market.
Of the disputes that were decided by the scheme, 29 were in the customer's favour, 146 in the bank's and 61 both parties.
Sladden said there had been a notable drop in fraud and scam complaints, down 40% year-on-year.
She said that was due to the efforts of banks and government agencies to raise awareness about how to avoid being duped by scammers.
She said the introduction of stronger fraud detection and prevention measures by banks in December was already having a bearing on the improved figures.
More than half of scam complaints involved unauthorised transactions, of which phishing and information harvesting scams remained the most common types.
Despite the rise in disputes, the scheme's overall caseload fell 13%for the year, due to a 10% decline in general inquiries and a 14% drop in simple complaints. The report said loans, bank accounts and service were the most common complaint categories.
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