A man who waited months for his KiwiSaver provider to process a hardship withdrawal request is in line to receive $500 in compensation.
The case is one of more than 500 disputes dealt with by Financial Services Complaints Ltd in its most recent financial year.
It is one of the external dispute resolution schemes that deals with complaints that cannot be resolved between consumers and financial service providers directly.
The scheme said it had a 49 percent increase in the number of cases it investigated in the year, and completed a record 532.
The product most complained about this year was money transfers, followed by motor vehicle finance and credit cards. Complaints about KiwiSaver were up significantly, largely as people complained about problems trying to withdraw money on hardship grounds. Lenders were the most complained about category.
The man told FSCL that he had health issues he believed weight loss surgery would fix. He was not able to receive the surgery via the public system.
He applied to withdraw his money on August 22 last year, providing the documents required. The provider’s website said it would usually review applications within 10 working days.
About four weeks later, he was told he was missing information in his application.
The application was sent to the supervisor on September 23.
The supervisor got in touch a week later saying that his application was declined because the quote he had provided for surgery was not genuine. The provider had contacted the wrong hospital department to verify it.
His application was finally approved on October 1.
The provider said it had experienced a surge in applications and said its communication could have been better but the man did not accept the apology.
FSCL said the provider’s delay was unreasonable. “We noted that people seeking hardship withdrawals are often vulnerable and stressed, and delays can have serious impacts.
Providers have an obligation to handle such applications carefully and with minimum delays.”
It said the provider should pay him $500.
In another case, a man lost $4800 after fraudsters used his credit card details. He had clicked a link in a text message that appeared to be from NZ Transport Agency Waka Kotahi.
He entered his credit card details and a one-time passcode which meant his card could be added to a scammer’s Google Pay wallet. Nine days later, three purchases totalling $4800 were made at three stores using the wallet.
He disputed the transactions with his credit card provider, saying he had not authorised the purchases. His card provider declined to refund him because the card had been added to the digital wallet using the correct authentication process, including the one-time passcode.
FSCL said it accepted he was a victim of a scam but said the terms and conditions of his card still applied, which required him to protect his details.
“There was also a gap of more than nine days between the card being added to the wallet and the disputed transactions taking place,” the scheme’s financial ombudsman Susan Taylor said.
“A one-time passcode can also be used to approve actions such as adding your card to a digital wallet. Never share or enter a passcode unless you are certain the request is legitimate. If in doubt, contact your card provider.”
The card provider said a chargeback was not available because the purchases had been made through a digital wallet after the goods had already been supplied by merchants who had no way of knowing the card details had been compromised.
FSCL considered it reasonable for the card provider not to provide a refund for the transactions. As a gesture of goodwill, the card provider refunded $207 in interest charges. FSCL considered the card provider’s offer was fair.
In another case, a trustee company was told to pay more than $100,000 to a woman who had her inheritance invested in cash when she could not be contracted. It had a return that was less than a typical term deposit in the bank, when a financial adviser had told her that a more appropriate investment would have been in growth funds that could have delivered about 6 percent a year over the period.
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