ING complaints queuing up at Banking Ombudsman
The Office of the Banking Ombudsman's workload jumped almost 40% jump as at the end of June this year, largely due to complaints about ING's two frozen collateralised debt obligation (CDO) funds.
Wednesday, August 13th 2008, 5:33AM
by David Chaplin
Brown said while the various complaints are at different stages of the process, the Office of the Banking Ombudsman has interviewed about 30 complainants so far relating to the ING funds.
She said a substantial number of similar formal complaints have been referred on to ANZ. Under the Banking Ombudsman's rules, complainants must first attempt to resolve the dispute directly with the bank in question before asking for a third-party ruling.
Brown said while ANZ has up to three months to resolve any complaint the bank generally is turning around disputes in less than four weeks.
"If the bank feels it has done nothing wrong or there are no hardship grounds it will pass the case on to us," she said.
In its June newsletter the Banking Ombudsman said it was helping ANZ identify clients who might be granted relief under hardship conditions.
To date, the Banking Ombudsman has made formal assessments on only two of the ING/ANZ complaints but Brown said these were "not typical" of the bulk of such cases.
"Many of the investment-related complaints coming to me are from customers who were approached by their banks with an offer of investment advice, rather than from customers who had actively sought such advice," Brown said in the June newsletter.
She said typically the Banking Ombudsman would clear 60% of complaints within 60 days, however, the ING funds were proving particularly complex.
"These are different products... in fact it's been quite difficult establishing just what the products were," she said.
According to Brown, the ING funds have generated the biggest wave yet of investment-related complaints to the Banking Ombudsman. In the 1990s the Ombudsman dealt with a spike in investment complaints after the failure of some bond products and saw a similar trend during 2001-3 market slump.
While the ING funds have dominated complaints so far, Brown said the Banking Ombudsman has also received cases relating to Tower's frozen mortgage fund and Blue Chip.
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