The customer service of banks is in the spotlight. Photo / Getty Images
Mortgage professionals have criticized some banks for their “terrible” customer service and the time it takes to process home loans.
An adviser said a bank did not take out a home loan for
Banks interviewed by NZME said the consumer finance and credit contracting law, introduced on December 1, which requires more financial information, has caused delays. Most had hired additional staff to tackle the problem.
The New Zealand Bankers Association also warned that the stricter regulations meant there was much less leeway for lenders and more applications could be turned down.
Consumer NZ revealed last year that banks reported 100,067 customer complaints to the banking mediator and that nearly one in five Kiwis had a problem with their bank in the year to June.
Poor customer service was the most common complaint.
Harry van der Merwe, of Hello Mortgage and Insurance Advisers in Rotorua, said it took a bank 31 days to get back to him to complete a mortgage for his client.
Another failed to collect a home loan application for 27 days.
“It’s just ridiculous … and it’s a real frustration for us.”
Assessment rates and revenue calculations had also changed, and van der Merwe said some of his clients who now had pre-approval would not meet the new criteria.
“So we tell them [clients] to find a home as quickly as possible before your pre-approval runs out. “
For example, van der Merwe said that the amount of uncommitted monthly net income in some cases had increased from $ 700 to $ 1,100.
A bank lender told him he was refusing 65 to 70 percent of requests.
“It’s huge. A lot of people who were previously approved don’t fit the mold anymore.”
First-time homebuyers would struggle, van der Merwe said.
“I would hate to be a first-time home buyer in this market; it’s going to be really tough for them.”
Rapson Loans and Finance owner Chris Rapson said in his experience that some banks have struggled to process loans and do not have enough experienced staff.
“They’re very difficult for us to deal with… it’s probably worse now than ever. I don’t think they care much, the days when the customer came first are long gone.
“I think they placed a higher value on the wealth of shareholders than on fulfilling their underlying mission, which is to provide banking services.”
Some banks had reported large profits despite Covid and lockdowns, he said.
Rapson said in his opinion, “So they’re not unhappy with things. They’re actually pretty relaxed because they make more money with the doors closed than the doors open.”
Rapson said some banks told him that once a loan application was made it could take 15 business days “before you hear from us.”
Ownit Rotorua director and chartered financial advisor Hayley Hubbard said there was no consistency on the part of some banks – “it’s actually everywhere.”
“I think it really depends on the deal and who gets it.”
She acknowledged that it had been difficult for banks to implement all of the CCCFA changes.
Consumer NZ chief executive Jon Duffy said that ultimately banks are accountable to their customers.
“If the service is poor, customers vote with their feet and turn to alternative suppliers.”
He acknowledged that banks were closing branches across the country and that there would be less face-to-face interactions.
“We believe that banks can provide satisfactory customer service to their remote customers, but they need to ensure that their services are accessible and suitable for all customers.”
A spokesperson for a bank said she encouraged customers to contact them directly if they were having an experience that did not meet their expectations.
The detailed mortgage and staffing data was commercially sensitive “but we can say that the number of our mortgage teams has increased”.
Another spokesperson for the bank said it has improved its response time to customers in recent weeks and now takes an average of three to five days to process a loan application.
“We continue to focus on balancing clients’ interest in receiving a prompt response and the need to process their inquiries in detail in order to accurately understand their financial situation,” said a spokesperson.
Another bank said that as part of the changes to CCCFA, customers may need to provide more information.
“This includes evidence of income, debts and expenses. While the changes are designed to protect clients from unaffordable debt, it also means that money borrowing requests may take longer to process,” said a spokesperson.
New Zealand Bankers Association chief executive Roger Beaumont said banks are responsible lenders and take their obligations under the law very seriously.
“New [CCCFA] the rules are quite strict and there is much less flexibility or leeway for the lender than before.
“For example, you may need to provide evidence of recent transactions so that your bank can get a clear picture of your debts and expenses. This means that it will take longer to get a loan, and more applications. may be refused because the more you dig into your finances, it could show that you are less able to repay the loan. ”
According to the Bank Ombudsman’s 2020/2021 annual report, it received 4,813 complaints, an increase of 5% compared to the previous report.
Denied mortgage applications and changes to branch services were among the top complaints.
To increase transparency in August 2020, the mediation program was launched and banks were required to register and forward every complaint.
More than 100,000 complaints were lodged with banks during the 2020-2021 fiscal year
“Previously, our own data was the only source of information on complaints, but we knew that data was only the tip of the iceberg,” the report said.