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Communtity Law Manual | Credit & debt | Dispute resolution schemes

If things go wrong

Dispute resolution schemes

Financial Service Providers (Registration and Dispute Resolution) Act 2008, ss 11, 47, 48, 63(1)

All lenders must be registered as financial service providers and be members of an approved dispute resolution scheme. There are four schemes that a lender could belong to. They are:

  • Banking Ombudsman, 0800 805 950,
  • Insurance and Financial Services Ombudsman, 0800 888 202,
  • Financial Services Complaints, 0800 347 257,
  • Financial Dispute Resolution Service, 0508 337 337,

All schemes are a free, independent and faster than courts. They can help with a range of problems, including:

  • the services, advice or products you’ve received from a lender or from another type of financial service provider, for example, a financial adviser
  • the conduct of any financial service provider
  • a financial service provider’s breach of a legal obligation, of an industry code of conduct or of their contract with you, for example, irresponsible lending
  • financial difficulty (including applications for hardship and withdrawals from KiwiSaver)
  • debt recovery (including repossession of consumer goods).

How do I complain?

Dispute resolution is available to any individual consumer and to any small organisation (one with fewer than 20 full-time equivalent employees).

You can first contact the dispute resolution scheme the lender belongs to for more information on their process. You can find out which scheme they belong to by:

  • asking the lender (or other provider)
  • asking any one of the dispute resolution schemes
  • checking on the Financial Service Provider Register at

For information and contact details for the four dispute resolution schemes in New Zealand, see “Where to go for more support” at the end of this chapter.

How are complaints resolved?

Each dispute resolution scheme has its own process for handling complaints with different rules and timelines. These schemes will all follow an overall process. You can contact the lender’s dispute resolution scheme at any time to clarify their process and your next steps. You can ask your financial mentor (if you have one), any support person or whānau to assist and support you at any point in the process.

The dispute resolution process, step by step

Step 1. Check the dispute resolution scheme your lender belongs to – You can do this by asking the lender, asking any of the dispute resolution schemes or checking on the Financial Services Provider Register (at ). You can contact them and tell them about your dispute and ask about their process. They may refer you back to the lender’s complaints department to see if you can resolve the dispute.

Step 2. Contact the lender – Contact the lender’s complaints department and try to resolve the dispute. You can contact Moneytalks if you need a financial mentor to assist you. If the lender has not responded within 3 months or you can’t agree to a solution (deadlock), lodge your complaint with the dispute resolution scheme. See “Where to go for more support” in this section for Moneytalks contact details.

Step 3. Lodge your complaint with the dispute resolution scheme – You can do this usually by filling out a complaint form. You must take your complaint to a dispute resolution scheme within a certain amount of time from the deadlock date. There are some types of complaints that dispute resolution schemes don’t cover. You can check with them or on their website to see if your complaint falls into a category they aren’t able to investigate.

Step 4. Giving the lender another opportunity to resolve the dispute – The dispute resolution scheme will contact your lender and give them an opportunity to resolve the dispute.

Step 5. Investigation – If the dispute is still not resolved, the dispute resolution scheme will investigate the complaint. They will contact you to gather more information. They will try to get you and the lender to come to an agreement that resolves the complaint through different methods, for example negotiation and mediation.

Step 6. Decision – If the dispute is still not resolved, the dispute resolution scheme may make a decision on what they believe should be the outcome. This decision will be given to you to agree to or not. This decision may be binding on the lender if you agree to it.

What are some outcomes that can come out of the dispute resolution process?

There are many kinds of settlement outcomes , for example, the schemes can:

  • award compensation for direct loss
  • award compensation for stress and inconvenience
  • change the terms of a contract
  • reduce the amount owed
  • lower, or remove, the interest charged
  • help negotiate debt repayment plans.
Example: Ali goes through dispute resolution scheme process

    Ali saw an ad that offered an attractive interest rate if they transferred their credit card balance to the bank. They went to the local bank branch and applied for a balance transfer. Ali thought the advertisement meant that they were getting a personal loan but what actually happened was their debt was moved from one card to another.

    Ali went to the branch to clear up the misunderstanding, but the manager was unhelpful and took Ali’s credit card.

    Ali complained to the disputes resolution scheme that the bank was registered with (in this case, the Bank Ombudsman). During the Banking Ombudsman’s investigation process, the bank offered Ali a settlement of providing a personal loan (what Ali thought they signed up to) and agreed to make a small extra payment to Ali to acknowledge unfair treatment.

    Ali accepted the bank’s offer.

What can I do if my complaint doesn’t get resolved by the dispute resolution process?

If your complaint isn’t resolved by the dispute resolution scheme, you can take it to the Disputes Tribunal (see the chapter “The Disputes Tribunal”) or the courts.

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