Banking Ombudsman, Clive Pillay, revealed that his office received 4 550 complaints against South African banks in 2012 which was a considerable increase from the 800 complaints made in 2011.
According to reports, Absa Bank topped the list with 1 335 complaints lodged against them. This was also a significant increase from the 850 complaints made against them in 2011.
In response to these reports, Absa said that during 2012, clients of various major banks were targeted by fraud syndicates. This contributed to much of the increase of complaints to the Ombudsman, as can be seen in the overall increase in these type of complaints at an Industry level.
“It’s disappointing at a time when we’ve been driving down the number of customer complaints significantly, that the propensity for our customers to refer to the Ombudsman rose in 2012. We want to assure customers that dealing with complaints is a very high priority and that we continually look at ways to improve the way we deal with complaints. Absa encourages customers to be on the alert for banking fraud, however additional security measures are being implemented for the safety of our customers,”said Absa spokesperson, Nobubele Mkwananzi.
There was also a surge in complaints against First National Bank (FNB) with 1 260 complaints compared to 2011’s 983 complaints. Reports state that Standard Bank complaints decreased to 845 while Nedbank’s complaints decreased to 648.
Regarding their volume of customer grievances, FNB’s Val Bosman, CEO of FNB’s Enterprise and Customer Services, said a large number of complaints relate to disputes about a fact such as an exchange rate, rather than service levels.
“Customer behaviour cannot be accurately related to the past 12 months. Customers have 36 months from the date of deadlock with their bank to take their complaints to the Ombudsman’s office. In some cases, however, customers feel aggrieved even when we acted correctly and appropriately according to the OBS adjudication,” said Bosman.
She added that FNB invites customers to approach the Ombudsman to obtain an impartial adjudication in the event that a dispute cannot be resolved between the bank and the customer.
Banking hot spots
The Ombudsman report also revealed that, like previous years, ATM-related complaints were the most predominant, with more than 2 000 cases being investigated. Internet banking complaints came second with a total of 1 160 files opened.
But according to the Ombudsman reports, very few cases were escalated to mediation or provisional recommendation stages, which they say reflected their commitment to fair and impartial decision making.
“During the year, we continued to resist the temptation to take on the mantle of either consumer champion or bank defender, and we believe we have achieved this. Our primary function is to resolve banking disputes, but we pride ourselves on using customers’ experiences to identify and rectify systemic defects in the delivery of banking services,” said Pillay.
Debt stressed customer complaints
Pillay added that of the overall complaints against SA Banks, 2 387 cases were found in favour of the bank, reducing the number of cases in favour of complainants from 47% in the previous year to 42% for the year in review.
This was attributed to an increase in the number of cases judged to result from debt-stressed consumers requesting relief from their banks in the form of extended repayment terms or reduced interest rates, rather than instances of bank maladministration.
This was attributed to an increase in the number of cases judged to result from debt-stressed consumers requesting relief from their banks in the form of extended repayment terms or reduced interest rates, rather than instances of bank maladministration.
Shepherd Silayi, a debt counselor consultant at Credit Matters, said the business has seen a surge of 700 clients applying for debt review in February and March this year.
To avoid the stress of debt, Silayi advises consumers to create a quarterly budget instead of a monthly one. He added that saving 20% of your monthly income is one of the best ways to avoid running into debt.
Luke Hirst from DebtBusters adds that before you complain to the Banking Ombudsman, you must have raised the complaint via the bank’s individual complaints handling service first. There are other options for debt stressed clients that are maybe more effective such as debt counseling, which restructures consumers’ finances and investigates reckless lending. Besides contacting a debt counsellor you can also speak to the NCR.