Medibank’s direct debit fail

IF YOU have Medibank health insurance, you might want to check your bank statements.

The insurer has blamed an IT bungle for a string of complaints to the Ombudsman about incorrect amounts being withdrawn from customers’ accounts.

Others flagged instances where their direct debits were accidentally cancelled or where the money was withdrawn at irregular intervals.

A total of 102 direct debit problems were reported in the three months to December, making it the number one complaint for the quarter, the Private Health Insurance Ombudsman’s latest bulletin reveals.

Medibank has admitted it is the source of most of these complaints, with a computer glitch to blame for the stuff-up.

The next most common Ombudsman complaint, which totalled 101 incidents with a range of insurers, arose out of customer confusion about their benefits when they rang the insurer or attended a retail branch, with poor record keeping partly to blame.

In proof that cancelling health insurance is at as difficult as ditching a gym membership, delays associated with cancelling policies accounted for 79 complaints, while 68 people raised the alarm when they were not covered for a treatment or service they thought was included in their cover. A further 67 people complained when they discovered they were entitled to a lower benefit than expected.


Medibank’s latest woes come as the insurer battles to improve its standing with customers, after upsetting members last year with late tax statements — also caused by an IT meltdown — and secretive changes to its in-hospital pathology and radiology benefits, which landed it in court with the ACCC.

In the latest quarterly results, Medibank accounted for 48.4 per cent of all complaints to the Ombudsman and 22.2 per cent of all disputes (complaints that have escalated), despite having a market share of just 27.6 per cent.

Its share of complaints has dropped from 60.7 per cent in the previous quarter, and the proportion of complaints classified as “disputes” has been halved.

Medibank’s chief customer officer David Koczkar apologised to the customers affected, about 1000 of its 3.8 million members, and promised to reduce the number of complaints to match its market share “within a year”.

“We’re pleased we’ve been able to improve our service for our customers, but we have more to do,” Mr Koczkar said in a statement.

“We recognise that we need to do better … We are methodically rolling out a plan to provide quicker and better service to our customers and offer products that meet their needs.

“After adding 60 additional call centre employees we’re now answering our customers’ calls faster, and with 24/7 online customer service now available we’re giving customers another option to reach us when it’s convenient for them.”


Disappointment over the meagre benefits paid for dental treatment sparked a deluge of Ombudsman complaints, with 2505 dentists and 637 patients venting their spleen over the complexity of dental cover, the difficulty for consumer of figuring out what is covered and the fact that benefits for dental treatment had stagnated while premiums continue to rise.

But the Ombudsman had a word of advice for customers: Do your homework.

“[We] recognise that some consumers have chosen policies that include dental centres and preferred provider schemes,” the Ombudsman said.

“For those consumers who would like to choose policies that do not operate preferred provider schemes or dental centres, they have the option to choose health insurers that are suited their needs.”

So if your policy only pays out a substantial benefit if you go to one of their “member’s choice” providers — and you’ve been going to the dentist of your choice — don’t expect to get much back.

Or go to the Ombudsman’s website and find a policy with more generous dental benefits by using its comparison tool.

The Ombudsman also publishes an annual State of the Health Funds Report on health insurers, which reports on how much insurers pay the cost of treatment for a range of services.

About author