Kiwibank says, “We do make mistakes … we have fallen well short”
A personal banking saga involving cancelled Eftpos cards, a non-responsive complaints team, and – eventually – an official apology and explanation.
Kiwibank has made a formal apology after cancelling a couple’s Eftpos cards on the day they moved house. The bank has also taken responsibility for failing to respond to several complaints made by the couple in the aftermath of the incident, putting it down to a series of human errors.
Kiwibank says it is considering making changes to its processes – including altering the message on its after-hours phone line – in the wake of the incident.
That’s a start, but Consumer believes Kiwibank should be reviewing its entire formal complaints process immediately.
After all, having your Eftpos cards cancelled with no warning is incredibly stressful. I should know. The couple involved in this story is me and my wife.
The big day comes – with stressful extras
Cars were jam packed, pets were pushed into cages, and two burly blokes spent a couple of hours cramming our family’s possessions into the back of a huge truck. After 13 years in the same house, my wife and I had decided it was time for a change.
So, in February, we purchased throws and pillows to pretty the place up and listed our home with a local real estate agent. Crickets followed. The housing market had slumped, prices were falling and some weekends no one showed up to our open homes.
Then we struck it lucky. We had a bite. A couple was interested. They loved the back garden, the renovated kitchen and the fruit trees we’d planted when we first moved in. An offer was made. Negotiations followed. We agreed on a price and finally, we were moving.
The big day was set for 16 June. In the lead up, we contacted our bank to make sure everything was organised. Our mortgage was being dissolved, so we wanted to make sure our main account, the one we use for day-to-day banking, wouldn’t be closed. Kiwibank, who we’d been banking with for the entirety of our 13-year mortgage, assured us it wouldn’t be.
No one said anything about the potential for our Eftpos cards to be cancelled. But that’s exactly what happened. At 5pm on the day of the move, both of our cards were made inactive.
We didn’t discover the error until the following day. We’d spent the day unpacking and sorting, before realising we didn’t have any heaters. It was winter, it was cold and the new house desperately needed some. Around 4pm, my wife headed to Farmers to buy two. There, near closing time, our cards were declined. The same thing happened when she tried to buy food for our dinner that evening.
Whenever we swiped or tapped in our pin, we received the same message: “Please contact your bank”.
A fraught Kiwibank complaints process
We tried to find out what had happened that night, but no one at Kiwibank’s after-hours number could enlighten us.
To begin with, the message on the after-hours line said it was for dealing with fraud and stolen cards only. We ignored that, but when we got through to a person they told us to head to Kiwibank’s St Lukes branch the following day – a Sunday – to pick up a replacement card. As to why it had happened – they couldn’t say. Replacement was our only option.
So, we filed an official complaint through Kiwibank’s website. We asked why this had happened? We asked for assurances it wouldn’t happen again, either to us, or any of the bank’s other customers. We wanted to know why the after-hours messaging service said it only dealt with fraud and stolen Eftpos cards, and not incidents like ours?
Most of all, we wanted to know how we’d be able to trust Kiwibank again? We asked someone to phone us back.
This was on 19 June. We sent two more messages over the following weeks. Over that time, we received two emails back – one an automated response saying our complaint had been received, the other from Kiwibank’s Complaints Resolution Team.
It said, “We will now investigate your complaint and aim to contact you within 5 – 10 business days to try to resolve things with you if we can.” Spoiler alert: that didn’t happen.
Consumer gets involved and Kiwibank responds
Consumer contacted Kiwibank about this incident on 21 July, more than a month after our cards were cancelled.
We told Kiwibank we were writing a story about the incident. We said we had questions about why and how someone’s Eftpos card could be cancelled out of the blue. We also said we had serious concerns about the bank’s complaints process.
Soon, we had our answers.
A detailed letter dated 24 July, from Kiwibank’s complaints resolution team, outlined exactly what had happened at the bank’s end. Our Eftpos cards needed to be deactivated while our mortgage was being discharged. By the end of the day we moved, the cards should have been reactivated. Someone forgot to do this. “In your case the cards were not reactivated correctly at 5pm ... resulting in the cancellation of your cards.”
As for the lack of response through its complaints process, the bank put this down to human error, including illness. “I acknowledge that due to human error what should have been a straightforward discharge has resulted in a poor experience for you and your family,” the bank said. “I am sorry for the stress and inconvenience that this has added to an already stressful time of moving house … We do make mistakes, and in this case, we have fallen well short.”
To acknowledge the stress and inconvenience caused by the incident, it offered us a goodwill payment of $800, which we accepted.
In a separate statement, Kiwibank’s media team denied systemic problems with its complaints system. “The delays in responding to your complaint occurred because of human error, not a systems issue. We take our complaints obligations seriously and aim to resolve a majority of complaints within two to five business days.”
A spokesperson said changes could be on the way. “We’ll consider whether any further changes need to be made to the way we do things as a result of your feedback.”
All eyes on the banking industry
This incident comes at a crucial time for banks, with a Commerce Commission study examining whether the industry is fair for consumers. Underway now, and supported by Consumer, the study is set to be completed by August next year. Finance minister Grant Robertson says it will examine whether banks were making excess profits and will ensure “consumers get a fair go”.
Do they currently? It doesn’t seem that way. A recent Consumer satisfaction survey found an increasing perception that banks’ profits were a result of charging customers too much. And a Consumer sentiment tracker showed 39% of New Zealanders don’t trust banks. In the satisfaction survey, Kiwibank rated third – coming in behind The Co-operative Bank and TSB – with an overall satisfaction score of 61%. That score dropped though when Kiwibank was measured on its call centre service (only 43% of respondents thought this was satisfactory) and whether it gave timely responses to enquiries (49%).
Got a problem with your bank? The Banking Ombudsman is a free and independent service available to anyone who has a problem with their bank or isn’t happy with the outcome of a complaint. You can contact the service at www.bankomb.org.nz, 0800 805 950 or [email protected].
Bank complaints templates
Our templates set out how to write to your bank about disputed credit card purchases, ATM withdrawals or stolen cheques, and how to approach the Banking Ombudsman if you need help resolving a dispute.