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Unmasking the Ombudsman

November/December 2004 - The official organ of Sasbo, The Finance Union Vol 26 No 10
By Adv Neville Melville, Ombudsman for Banking Service

At the banking industry function I recently attended, one of the speakers mentioned that there was a perception that the relationship between the ombudsman's office and the banks was adverserial.

If the speaker is right and the banks do still perceive us, at the Ombudsman for Banking Services, to be adversaries, we have a major problem. The success of our office depends very heavily upon the co-operation of the banks that fall within our jurisdiction. As the banks themselves initially establish d the ombudsman scheme, it follows that if we look good, the banks will also look good. The opposite is also true.

One might well ask how the banks should view the ombudsman. I am a bit reluctant to use the term 'impartial referee' after all the match fixing scandals in South Africa recently! Gerry Murphy, the Ombudsman for Irish Credit Institutions, puts it like this: "It is just as important that the people on the institutional side [the banks] as it were, should have as much confidence in the impartiality of the ombudsman as an arbitrator, as the people on the consumer side."

The New Zealand Banking Ombudsman, Liz Brown, also emphasises the neutral role of an ombudsman: :Although the Banking ombudsman is in a very real sense a consumer watchdog, the need to maintain a proper independence balance between the interests of the banks and the interest of the consumers means that the Banking Ombudsman is not an advocate for consumers or for the banks,"

'Advocate' is used here in the broad sense of someone who pleads or advances the cause of another.

How did it come about that the ombudsman is considered by some as an adversary? Perhaps it is inevitable that an organisation that has a role in reviewing the activities of others will be distrusted: that is certainly the case with auditors.

This may have been compounded by a bit of mischief on the part of those within the banks whom it suits to portray the ombudsman as the bogeyman, to pressurise people elsewhere in the organisation into getting things done.

But is there a factual basis for any perception of an adversarial relationship that there may be? I am sure that the only time that most people working in the banks hear about the ombudsman in connection with some adverse finding or other. But, if you have a look at the case summaries in our annual reports, you will see that we are, in fact, very even-handed in our approach. The breakdown of our finalised cases according to whether the went in the favour of the banks or partly or wholly in the favour of the complainant shows that 47% were for the banks and 53% were for the customers. The hundred of complaints that are knocked out of the process are not included in these statistics.

At the Ombudsman's office, we consider ourselves to be an independent but integral link in the customer service supply chain. We believe our existence can be justified on the grounds of customer retention by the banks and the protection of the bank's reputations. We also have a role in drawing the attention of the banks to problem areas and practices that give rise to customer dissatisfaction.

Much of this is captured in our mission statement:

The Ombudsman for Banking Services is dedicated to providing banks and their customers with a quick and efficient dispute resolution service. Our professional staff aim to do this in a fiar, impartial and confidential way and strive to improve general banking practice.

I have no doubt that most people who have had to respond to our queries considered it a nuisance to have done so. They perhaps forget that doing so is a lot better than having to give evidence in court.

To leave you with a parting thought: you never know when you yourself might be a customer in need of our help. Yes, we do sometimes receive complaints form bank employees about the way their banks have dealt with them as customers (not as employees, who we would not be able to assist.)