Most complaints get sorted out by bank

Disputes between borrowers and their banks surged nearly 30 per cent last financial year. A series of natural disasters last summer put more customers at odds with their lenders and rising interest rates earlier this year also sorely tested relations with customers.

The number of disputes over home loans, credit cards and personal loans all rose sharply. The Financial Ombudsman Service report revealed that the financial industry paid a total of $3.6 million in compensation to customers affected by serious problems, such as being charged incorrect interest rates in the year to June 30.

There were more than 30,000 disputes, up 27 per cent from the year before, continuing a run of increases in complaints for each of the past three years. However, the report shows that more than 70 per cent of disputes were resolved by discussion between the lenders and customers, rather than needing a formal decision by the Ombudsman.

Source: The Age