These are the most complained-about banks in South Africa

The Ombudsman for Banking Services (OBS) has published its annual report for 2020, revealing the relationship between the country’s largest banks and their clients.

In 2020, the OBS said it opened a record 7,717 formal cases, compared to the 6,472 cases – a 19% increase in complaints in the sector. During 2020, the OBS said it closed 7,230 cases compared to the 2019 closures of 6,133 – an 18% increase.

In addition, the OBS recorded an even more significant increase in the number of referrals received in 2020. “Referrals are complaints received by the OBS from complainants who have not afforded the bank an opportunity to first resolve the issue with them.

“The OBS sends these matters to the banks on behalf of the consumers for the bank to attempt to try to come to a resolution. If the problem is not resolved directly with the bank, then the matter is converted to a formal case which forms part of the reported statistics,” said ombudsman, Reana Steyn.

A total of 8,389 case referrals were sent back to the banks compared to the 4,709 that were sent back in 2019. Steyn pointed out that the reason for this increase may be due to challenges people faced in getting hold of their banks during lockdown when call centres were overwhelmed.

“Due to the lockdown and subsequent ripple effects, some bank customers were desperate and came straight to our office before contacting the bank,” she said.

Types of Complaints received in 2020

Internet banking complaints decreased and is no longer the largest category of complaints received – which had been the trend over the past two years. Current accounts is currently the category which is seeing the highest number of complaints.

Below are the top-ranking categories:


1. Current accounts

Current account complaints consist of complaints relating to fraud, fees and charges. Complaints relating to the bank’s failure to give prior notice of account closures was also a major cause of complaints. Collectively, these concerns account for 80% of the current account matters, said Steyn.

In 2018 and 2019, these complaints made up 10% and 12% (respectively) of the complaints received. In 2020, there was a further 7% increase from 2019 complaints. A total of 1,338 current account complaints were opened in 2020 and in 465 (35%) of these cases, a finding was made in favour of the complainants.


2. Internet banking fraud

In 2018 and 2019, internet banking complaints was the largest category of complaints accounting for 22% and 18% of complaints (respectively). In 2020, the number dropped down to 13%.

The OBS closed 981 internet banking fraud cases in 2020 as opposed to the 1,292 in 2019. 73% of these complaints were resolved in favour of the banks, and 197 (27%) were in favour of the bank customers.


3. Credit Card complaints

Credit card complaints decreased from 15% in 2019 to 11% in 2020. Despite this, it still maintained the third position of top complaints.

A total of 895 credit card-related complaints were closed by the OBS in 2020 and 76% were resolved in favour of the bank. Around a quarter of the cases (266) were resolved in favour of consumers.


ATM related complaints

ATM complaints accounted for 9% (732 cases) of the cases opened in 2020. This is down by 4% from 2019 where ATM complaints made up 13% of cases. The majority of the issues raised around ATM complaints were still fraud related. 84% of these cases (617) were resolved in favour of the bank, and only 16% (115 cases), were found in favour of the consumer, the OBS said.

Steyn pointed out that the common thread in all the above-mentioned categories was that the majority of the consumers, unfortunately, fell victim to fraudulent scams.

She said that the reason why the majority of these matters were found in favour of the banks was that after a full investigation was conducted, the OBS was forced to conclude that the fraudsters managed to manipulate the consumers into transferring funds into their account or to give them their confidential banking details which then enabled the fraudulent transactions.

Steyn said that the OBS recovered R16 million which was paid back to consumers. She said that most of these funds were direct monetary losses. However, through her offices’ intervention, these losses were recovered and refunded.

Covid-19 related complaints

As a standalone category, Covid-19-related matters made up 2% (143) of cases opened in 2020. However, Steyn explained that Covid-19-related complaints were reported in the sub-categories through all the main categories, especially the ones mentioned below.

Personal loan complaints made up 11% (831 cases) of the complaints received in 2020 which is consistent with the previous year. The OBS found in favour of the complainants in 31% (225) of the cases.

Mortgage loan finance complaints accounted for 8% (583) of the complaints received of which 72% (428 cases) were in favour of the bank while 28% (155 cases) was in the bank customers’ favour.

Vehicle finance accounted for 7% (454 cases) of the complaints received, only 1% less than previous two years. In 78% (367) of these complaints, the OBS found in the banks favour. The OBS found in favour of the complainants in 22% (87) of the complaints.

Most complaints opened in 2020 were from Gauteng at 50% (44% in 2019), followed by Western Cape at 17% (15% in 2019), and Kwa–Zulu Natal at 12% (13% in 2019).

Most complaints recorded were from people over the age of 40 and related to current accounts, credit cards and internet banking fraud, the Ombud said.

In all age categories, internet banking dropped from being the most complained about category and was replaced by current account complaints which, in most instances, was also due to fraud.

Performances by bank

There was a significant increase in cases for most banks when compared to 2019. Only Absa Bank recorded a reduction in complaints (down 36% year-on-year).

Steyn cautioned that the number of files opened against a bank should not necessarily be regarded as an indication of that bank’s overall or complaints handling performance.

She noted that banks vary in size, client profile and product mix. In addition, fraudsters seem to periodically target certain groups of customers. All of these factors impact on the number of complaints made against any given bank.

The following number of formal cases were opened against the five big banks in 2020. The individual increases should be seen in light of the overall increase in number of complaints received by the OBS:

  • Absa bank saw the number of complaints opened against it with the OBS decrease from 1,483 in 2019 to 943 cases in 2020 (a 36% decrease from the previous year);
  • First National Bank had 2,197 complaints opened against it (a 22% increase from 2019);
  • Standard Bank had 1,572 complaints opened against it (an increase of 28% in the number of the complaints);
  • Nedbank had 1,217 cases opened (an increase of 10%); and
  • Capitec Bank had 1,259 cases opened against it (a 39% increase).

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These are the most complained-about banks in South Africa