Complaints from banking consumers are up by an “unprecedented” 35%, internet fraud has outstripped ATM complaints and consumer education is sorely lacking, says the banking ombudsman’s latest annual report, which was released on Wednesday.
The Ombudsman for Banking Services says that 7 056 formal cases were opened, showing a 35% spike from the previous year, with 99% of cases closed within four months.
“On average, cases were closed within 34 business days. This shows the dedication of the staff to produce quality work, on time,” says Reana Steyn, the ombudsman. “Because we are dealing with banking-related complaints, that often means the customer is out of pocket, and we strive to deliver quality outcomes swiftly. The automation of certain processes in case handling was implemented in the latter part of the year, resulting in a lean, efficient, time-saving and cost-effective business tool.”
Steyn, who took office in July last year, says she believes the uptick in complaints is a result of consumers becoming more assertive and finding her office’s contact details online.
“Thousands upon thousands of complaints are resolved by the banks themselves. People also know about our office, with 10% of complainants hearing about us in the media,” Steyn says.
“We’re very strict at the banking ombudsman – the dispute goes through senior people in the banks’ dispute-resolution departments before we take it. They have entire departments devoted to resolving customers’ issues, and they prefer to settle issues there. That shows the process is working, because staff are very sensitive about how many matters are reported to us: it causes reputational damage.”
The biggest concern for her office was the increase in internet fraud, which, Steyn says, is growing because of a lack of awareness.
“People, and especially the elderly, are using a product that they don’t quite understand – they don’t understand the implications of giving personal information out, or allowing a stranger to ‘help’ them at the ATM. But if you’ve fallen for a phishing scam or given your PIN to someone, can you honestly blame the bank?”
She says fraudsters are also intercepting account details and changing theme.
“I have a case now, which has been reported to the Banking Association of South Africa. An attorney paid a large sum of money into the wrong account because they received a mail instructing them to do so and didn’t check. But it’s not the bank’s fault if somebody sends you an email saying ‘please pay money into this account’ and you do. Or if you receive instructions to deposit money into an account and you haven’t double-checked: Is the name spelled correctly? Is it the same email address as before?”
Steyn says her office was concerned that there were so few complaints in some provinces: “It’s worrying, so we’re going to focus our marketing on those provinces. What does that mean if they have so few complaints? It might be because they don’t know about us.”
It’s not only up to her office to educate the public: Steyn says consumers must educate themselves. “There’s more banking being done online, so consumers are far more vulnerable. It’s also interesting that the top three categories are crime-related: internet banking (22%), ATM (18%) and credit card (13%). These are mostly avoidable.”
Consumers who are unsuccessful in their complaints often complain bitterly, but that doesn’t prove bias towards the banks. “Our office found in favour of complainants in 27% of the cases. That number might appear low, but it’s in line with international experience. We believe it’s owing to the fact that banks have set up highly effective complaints-resolution departments,” Steyn says.
• Consumers are encouraged to take up their dispute with the ombudsman if their complaint has not been handled internally within 20 working days. The ombudsman’s contact details are: telephone 0860 800 900 or 011 712 1800, email [email protected], fax 011 483 3212, or write to PO Box 87056, Houghton, 2041.