Banking Ombudsman Scheme Undergoes Independent Review by Consumer Advocacy Council Chair

The Banking Ombudsman Scheme (BOS) has recently announced the commissioning of an independent review of its framework, with Consumer Advocacy Council chair Deborah Hart leading the charge. This review comes as part of the Scheme’s requirement to provide a report to the Minister of Commerce and Consumer Affairs every five years.

Hart, who also conducted the last independent review in 2019, will be assessing the Scheme against its 2023-2026 strategic plan. The review will focus on six key issue areas including accessibility, independence, fairness, accountability, efficiency, and effectiveness.

One of Hart’s previous recommendations was for BOS to increase its visibility to consumers through banks, and to consider establishing a memorandum of understanding with regulatory bodies such as the Reserve Bank of New Zealand or the Commerce Commission.

This news comes amidst a larger conversation around banking in New Zealand, with banks facing scrutiny over scams targeting customers. Minister of Commerce and Consumer Affairs Andrew Bayly has ordered banks to come up with a voluntary reimbursement scheme for scam victims by September, and has announced changes to align the rules of dispute resolution schemes and increase the maximum award amount to $500,000.

Additionally, Finance Minister Nicola Willis has announced an investigation into bank competition, focusing on how banks treat homes versus farms. The Commerce Commission has also released a draft report highlighting the major banks’ focus on profit margins, leading to underinvestment in technology and limited innovation.

The independent review of the Banking Ombudsman Scheme will provide valuable insights into the effectiveness and efficiency of the dispute resolution service, ensuring that it continues to meet the needs of consumers in the ever-evolving banking landscape.