Wellington, July 23 NZPA - Around 80 percent of complaints received by the Banking Ombudsman about ANZ's handling of ING New Zealand's frozen funds have been settled in favour of the customer.

More than 13,000 investors had money in the Diversified Yield Fund (DYF) and Regular Income Fund (RIF) locked since March last year.

Investors argued the funds were marketed as safe when they invested in risky collaterised debt obligations and the Commerce Commission, as regulator of fair trading, is investigating. Investors have pledged to fight on.

ING NZ in May offered investors a choice of accepting 60c per unit for DYF and 62c per unit for RIF investors now, or a five-year cash account option.

ING has made an offer to around 14000 investors in the Diversified Yield and Regular Income Funds.

At least 95 percent of unitholders have accepted the offer.

Of these 14,000 investors, only 2700 investors came into these products through ANZ's advisory network.

Those investors who had entered ING through ANZ advisers had until July 31 to make a complaint to the bank about their treatment.

Banking Ombudsman Liz Brown -- who is in her final week in the job -- told Parliament's commerce select committee she had received 521 complaints about ANZ's handling of ING, of which 195 had not been investigated as they had been resolved or were in the bank's own process.

Of the remaining 326, 197 were still being investigated and 129 had been completed.

Those completed included 102 which were settled all or partially in favour of the customer.

"They were not cases where I ruled. A lot of them were cases where we arranged an agreed settlement between the bank and the customer."

ACT MP John Boscawen said the July 31 deadline should be extended, given that 80 percent of the complaints investigated had been upheld. Other people might need more time to lay their complaint, he said.

However, Ms Brown said investors had had more than a year to complain.

"It may be that the remainder of the investors do not feel they have been treated unfairly by the ANZ. I don't know," she said.

Asked whether she believed ANZ advisers knew what they were selling, and whether they were qualified to advise people on the products, she said: "I think it's quite clear that they were not well understood.

"They were certainly not well understood by investors, probably not particularly well understood by advisors."

Her office had debated at length the ethics of advising someone to enter into an investment they did not, and could not possibly, understand.

"Of course I've seen people who have complained to me who clearly can't and don't understand term deposits," Ms Brown said.

"It's quite difficult to say that someone should never be advised to invest in something purely because they can't understand it.

"What is important is that they should understand clearly, and be given information about, the features that are important to them and, in particular, the risks of the product."

Mr Boscawen said banks had a perception of being trustworthy, particularly for the elderly. He told of one woman, now deceased, who invested $180,000 -- all her cash -- in the fund after being advised to, despite already having it in a term deposit.

That meant the loss was not a simple $1 to 60c, it was $1 plus about 6 percent interest, reduced to 60c.

Ms Brown said when she found wholly in favour of a complainant and concluded they should never have been in a particular fund, she recommended the return of their capital plus the interest they would have earned on a term deposit.

An ANZ spokeswoman said the bank believed it had given customers a fair and reasonable time to accept the offer and lodge complaints.

"Over 98 percent of investors have accepted the ING offer and we understand some further acceptances are still being processed so this number could go higher," the spokeswoman said.

"We believe we have given our customers a reasonable amount of time to lodge a complaint. As the Banking Ombudsman said at the committee hearing this morning, investors have had over a year to go through the complaints process."

If one or two complaints came in after the deadline the bank would try its best to be flexible in dealing with them.