Jump in South African bank complaints
The Ombudsman for Banking Services (OBS) has revealed a rise in the number of complaints handled by the office over the past year.
In its 2013 annual report launched in Sandton on Wednesday (16 April), OBS noted that during 2013, 4,950 cases were dealt with, concerning issues ranging from mobile banking and credit cards to ATMs, mortgages and car finance.
This was up from 4,450 cases opened in 2012, and 3,684 opened in 2011, and 4,552 total cases dealt with in 2012.
The OBS showed that in 2012, 4,140 cases were resolved, with 2,387 in favour of South Africa’s banks, and 1,753 in favour of the complainants.
Of the total number of cases for 2013, just over 1, 900 were found in favour of the consumer, which represented a recovery of about R16 million from the banks, the OBS said.
Among these were 72 debit order issues, dealing particularly with unauthorised debits, 38 (53%) of which went the way of the complainant.
The ombudsman noted that the majority of ATM cases were deemed to be the result of consumers compromising their personal details, resulting in a greater number of findings for the banks.
As in previous years, ATM-related complaints dominated the caseload in 2013, with more than 1,800 complaints compared to 1,100 in the previous year, which accounted for 23% of all complaints.
“This increase, ironically, can be attributed to the stepping up by banks of security measures to prevent electronic banking fraud. Criminals are returning to the ‘easier pickings’ of automatic tellers, resorting at times to removing the toll-free numbers from the machines to delay victims’ alerts to the banks,” the ombudsman said.
However, the office said it investigated about 200 more internet banking complaints than in 2012, which is to be expected given the surge in electronic banking and the rapidly growing numbers of bank customers.
Ombudsman, advocate Clive Pillay, said that it is encouraging to see an increasing number of complaints resolved at initial assessment stage, when the matter is referred back to the bank with an OBS recommendation.
“This reflects the willingness of the banks to abide by our rulings, which are seen as bias-free,” he said.
Among the more involved and complex disputes, there were 200 more cases across the board escalated for further investigation.
Contract complexity
In terms of the Consumer Protection Act, the OBS warned that contracts must be drafted in simple, understandable and unambiguous language, yet South African banks seem to be falling short of the stipulation.
Pillay urged banks to review the wording of their contracts with the need for lucidity in mind.
“We receive complaints from consumers who are not sure what they have signed and, consequently, find themselves in disputes with their banks,” he said.
“Consumers sign a loan agreement, for example, when, as a result of woolly language and legalese, they think they are signing a vehicle financing agreement.”
Security measures
In his chairperson’s report, Advocate John Myburgh SC, stressed the importance of banks’ security measures remaining one step ahead of the devious minds of fraudsters (the number of cellphone phishing cases rose by 27% during 2013).
“Bank information technology specialists need to work with mobile application developers and wireless network service providers to address the challenges associated with security of financial transactions and transmission of financial information electronically and continually update systems to counter new threats,” Myburgh said.
“Security should address the physical part of the device, any thick-client application running on the device in the case of phone theft, authentication of the device with service providers before initiating a transaction, user ID/password authentication, encryption of data being transmitted and data held on the device for reference later.”
However, he lauded the banks for their heightened attention on security, which he described as ”encouraging for us and reassuring for consumers”.
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