Complaints soar about mortgages and margin loans

The number of complaints against banks, financial institutions, advisors and insurers has soared to record levels never seen before. The financial ombudsman service is scrambling to hire more staff because they expect the number of complaints to continue to rise.

A few years ago just a few thousand complaints about financial services and products would be referred to external dispute resolution throughout Australia.

But in the year to June 2009, total complaints were up a whopping 77 per cent and the ombudsman expects that to continue, projecting the number of complaints to rise this financial year by another 50 per cent.

Most complaints relate to the advice or the disclosures given to customers when they signed up for their financial product says Alison Maynard, Ombudsman for Investments, Life Insurance & Superannuation at the Financial Ombudsman Service.

Gearing strategies for investing and margin lending is a particular problem area that crops up time and time again for the ombudsman. Fixed rate mortgages are also the subject of many complaints that Alison Maynard has to deal with.

Source: Courier Mail