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Borrowers urged to know what they’re signing as loans and travel insurance top complaints

New Zealanders are being reminded to make sure they know what they’re getting into before signing loan agreements, insurance policies and other financial contracts.

The reminder comes as dispute resolution scheme Financial Service Complaints Limited’s (FSCL’s) annual results show consumer credit and travel insurance remain the top two areas of complaint, accounting for over half the cases investigated by FSCL in the last year.

FSCL received over 2,600 enquiries and complaints over the last year, down 17% on the previous year. Despite this, the number of cases FSCL received for investigation remained static – 198 compared with 201 in 2013/14.

Chief Executive Officer Susan Taylor said she expected to see a rise in consumer credit cases in the coming year as the recent changes to credit laws “bedded in”.

“The new consumer credit laws and Responsible Lending Code are welcome additions to the financial services landscape and will help us right some unfair practices in the industry.

“But we are still seeing too many complaints where consumers haven’t understood the loan contract they’ve signed or the fees they’ve been charged, or weren’t aware of the limits to insurance cover.”

Ms Taylor said that while she urged borrowers to seek advice before signing a loan agreement and to ensure they could afford to meet the repayments, the onus was on lenders to understand and meet their obligations under the law.

One recent example saw a couple facing a potential mortgagee sale of their home after facing a demand for payment of over $115,000, which was later reduced to $53,000. The loan company had incorrectly charged default interest on the entire loan amount for more than four years without telling the couple, after the couple missed their first repayment at the start of the loan.

“We found that the lender had acted oppressively in trying to take the action it did and the couple only owed around $8,000. In the end the couple were able to clear their debt and received compensation for the stress and inconvenience caused” said Ms Taylor.

“Borrowers need to know that if they have a problem with their loan, and feel the lender has treated them badly, there is an independent dispute resolution scheme they can go to for help at no cost.”

FSCL will release its full annual report for the 2014/15 financial year in October.

Media contact:

Susan Taylor, Chief Executive Officer FSCL

P: (04) 472 3725



FSCL is an independent not-for-profit external dispute resolution scheme approved by the Minister for Consumer Affairs under the Financial Service Providers (Registration and Dispute Resolution) Act 2008. It was the first scheme to be approved and has been designed for and in consultation with the financial services industry on the principles of efficiency and effectiveness. It is governed by an independent Board with equal consumer and industry representatives, and an independent Chair.

FSCL provides dispute resolution services to participating financial service providers and their clients. The FSCL process focuses on resolving complaints through conciliation and assisted negotiation and is also able to make formal determinations which are binding on financial service providers. The FSCL process is free to consumers. For more information on FSCL visit

The other dispute resolution schemes in the financial services industry are the Banking Ombudsman, the Insurance and Savings Ombudsman and Financial Disputes Resolution. For more information about the financial services disputes resolution regime visit