There was strong reader interest this week in FSCL reporting a spike in the number of financial disputes in the first half of the financial year…
Complaints are leading to a spike in financial disputes, according to Financial Services Complaints Limited, which reports a 41% increase in disputes in the first half of the reporting year, although the number of disputes about financial advisers had dropped.
It says a total of 235 disputes were opened between July and December, up from 167 in the same period the year prior, with its figures showing that while the number of disputes about insurers were up, those about financial advisers fell.
The financial ombudsman service’s statement shows that in the Jul-Dec 2025 period disputes about insurers totalled 31, compared with 23 in the same period in 2024, while disputes about financial advisers dropped to 26 from 40 a year earlier.
Financial Ombudsman, Susan Taylor, says the 41% increase reflects wider economic challenges that many New Zealanders continue to face. “We expect high dispute levels to persist as long as economic conditions remain difficult for many.”
Taylor notes the rise also signals consumers’ growing awareness of dispute resolution services and their willingness to challenge financial providers and demand accountability.
“Disputes are complaints we investigate to negotiate solutions between consumers and their financial services providers. Many complaints are resolved before they reach this stage.”
…People often don’t realise how strict the KiwiSaver rules are, leading to complaints about declined applications…
The service notes that KiwiSaver hardship withdrawal rejections are the greatest contributing factor, as people seek help with paying their bills, but are unaware of the difficulty in meeting the hardship requirements under the KiwiSaver Act.
“People often don’t realise how strict the KiwiSaver rules are, leading to complaints about declined applications,” says Taylor.
“We see people with ideas about using their KiwiSaver for longer-term financial relief,” she says, pointing to a recent case where a woman wanted to withdraw KiwiSaver funds to buy a tiny home, rather than renting, but was only able to secure a smaller, short-term financial solution.
“We understand this is frustrating when you need financial security, but KiwiSaver savings are meant for your retirement. You can’t access your funds before retirement, except for a few limited exceptions, and this is reflected in the Act, rules and industry guidance,” she says.