Bank customers are criticising tactics being used in New Zealand, as banks across the Tasman face the fallout from a scathing royal commission.

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The Reserve Bank and the Financial Markets Authority told New Zealand's banks this week to prove they are not cheating customers and lying about it like their Australian owners.

While Bankers Association chair David McLean said there was no such misbehaviour in New Zealand, bank customers have stepped forward to complain about bad treatment.

One customer, Ann, went to her bank to get a loan and was told she would have to buy insurance as well. She said she reluctantly agreed while feeling pressured.

"I just thought that's what happened with banking these days that if you got a loan there were certain conditions that you had to fulfil to get the loan," she said.

She said she did not complain to the Banking Ombudsman because she was worried about the repercussions.

"I've got this relationship with the bank and I might need them in the future and I don't want to prejudice my ability to get loans," she said.

Pete Rose Smissen changed banks after a run-in with Westpac over a credit card he cancelled when he moved to London a few years ago.

His attempt to recover the money he had loaded onto the card was a long and fruitless exercise, he said.

"They just made it as difficult as they could ... [the bank] knew I was calling from London and would leave me in a hold queue for 45 minutes till eventually I just gave up and they kept the money," he said.

Mark Lewis banked with Westpac for 35 years, but left after trying to renegotiate the interest rate on his mortgage.

He said new customers were getting better deals.

"The bank manager said to me at the time 'It's the way we're doing things, but I don't necessarily agree with it'," Mr Lewis said.

He said in hindsight he should have gone to the Banking Ombudsman to complain.

KiwiSaver provider Simplicity's managing director Sam Stubbs told Morning Report an inquiry was the only way to confirm banks were not engaging in similar behaviour to those in Australia.

"People are scared to complain about banks, banks have a lot of power when they are lending you money ... so a royal commission would be able to provide a degree of comfort for people to tell their story."

Even the retail sector was questioning the conduct of deals by New Zealand banks with credit card companies.

Retail New Zealand spokesperson Greg Harford said shop owners were charged massive fees of up to 5 percent of a transaction every time a credit card was used.

Mr Harford said these fees were not transparent and ultimately passed on to all customers, which was especially unfair to buyers using cash not credit.

"Someone who is perhaps less well off and who pays cash for their groceries is ultimately subsiding airpoints for rewards programs for better-off consumers."

Banking Ombudsman Nicola Sladden said there was no evidence of systemic bad behaviour and that the Reserve Bank and FMA's directive went far enough.

"We have not seen any of the widespread or systemic conduct issues that are coming out of Australia," she said.

She said the complaints she received were usually isolated incidents and involved miscommunication.