18 Jan 2023

'Get-rich-quick' scams blamed for rise in financial services complaints

1:55 pm on 18 January 2023
Pile of New Zealand currency laying flat on table

Complaints about non-bank lenders made up about 64 percent of the complaints. Photo: 123RF

More people are making complaints about financial services as economic pressures build.

There was a 17.5 percent increase in the number of complaints lodged with Financial Services Complaints in the six months to December.

Financial Ombudsman Susan Taylor said consumers should speak to their lenders as soon as they begin to struggle to make loan repayments, as the free financial dispute resolution service sees a marked increase in complaints.

"From higher cost of living costs and interest rates to back-to-school expenses for a lot of families, we are seeing the increasing financial pressure on consumers translating to an increase in complaints," Taylor said.

While complaints rose, the number of disputes formally investigated was little changed from the year before.

Complaints about non-bank lenders made up about 64 percent of the complaints, with lender complaints up about 7 percent.

There was also an 80 percent increase in complaints about transactional service providers, such as foreign exchange dealers, money transfer agencies and trading platforms.

"A number of these complaints have been about fraud, [indicating] consumers may be trying to alleviate the financial squeeze through 'get-rich-quick' scams," Taylor said.

"The consumer has sent money off-shore for investments/Bitcoin via a transactional service and then looks to blame the money transfer agency once they realise they have been scammed."

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