The most complained-about banks in South Africa – and one that saw a dramatic turnaround

The Ombudsman for Banking Services (OBS) has published its annual report for 2021, revealing the relationship between the country’s largest banks and their clients.

Banking complaints continued to rise in 2021 after a significant jump of 19% in 2020. The OBS finalised 8,039 cases in 2021, up 9% from 7,230 cases in 2020.

Ombud Reana Steyn said that the rise in cases was driven primarily by the Covid-19 pandemic and the government’s national lockdowns, which disrupted the traditional banking model, testing it to its limit.

“Banks are battling to address this,” she said. “2021 brought with it some serious financial challenges for most South African banking consumers. These consumers had to turn to the OBS for intervention against their banks.”

This is evidenced by the record number of complaints received and investigated by the OBS in 2021 where the number of complaints adjudicated by the OBS increased by 7% as compared to 2020, she said.

On top of the official cases handled by the OBS in 2021, over 10,330 complaints were referred to the banks in 2021. Referrals are complaints received by the OBS from consumers who have not provided their banks the opportunity to resolve the complaint with them in an amicable manner.

The OBS sends these complaints to the banks, on behalf of the consumers, for the banks to attempt to resolve the matters directly with consumers. The matter is only converted into a formal case if the problem cannot be resolved by the bank.

Biggest complaints

Continuing the trend from previous years, 2021 was no different with many of the complaints received and resolved by the OBS relating to fraud, maladministration by banks, closure of bank accounts and repossessions.

According to Steyn, many of the complaints opened and investigated by her office in 2021 involved instances where bank customers became victims of various types of fraud.

However, internet banking complaints reclaimed their pole position as the category with the most complaints in 2021 accounting for 19% of the total complaints opened.

The second biggest complaint category was service-related complaints – specifically, maladministration by banks, consumers being debt stressed, account closures by banks and consumers disputing the fees or interest rates applicable to their agreements.

Current Account complaints accounted for 16% of total cases opened, and personal loan and mortgage finance complaints remained constant at 11% and 8%, respectively, for the past 3 years while credit card complaints reduced from 11% in 2020 to 9% in 2021.

There was an increase of 2% (from 6% in 2020 to 8% in 2021) in the number of complaints opened for vehicle finance-related issues, the OBS said.

ATM-related complaints continue their decline with the total number of complaints opened accounting for 7%.

Steyn pointed out that in previous years, such as in 2015, ATM-related complaints constituted the largest number of complaints that were received and investigated by the OBS. However, due people choosing technology to do their banking, internet banking has taken over.

“This trend has obviously been heavily influenced by the Pandemic,” she said.

Customers vs Banks

In 73% of the matters resolved by the OBS in 2021, the findings were in favour of the banks. This means that in 5,846 (72.7%) cases, there were no legal nor fair grounds to uphold the complaint against the bank.

For consumers who had legitimate and substantial claims, the concerned banks were held 100% liable for the complainant’s claims in 15.9% (1,276) cases.

In 4.5% (363) of the cases, the banks were found partially liable. This means that in 1,639 (20.4%) matters adjudicated in 2021, the OBS concluded that there was some wrongdoing on the part of the banks.

“Of the matters concluded in favour of the complainants, over R19.4 million was awarded and offered because of the OBS’s direct intervention,” said Steyn.

In 6.60% (530) of 2021 complaints, no award was made to the complainant. However, the OBS was able to provide them with information on why this was the case.

Bank performance

2021 saw a notable increase in cases for most banks compared to the previous year.

While in 2020 Absa Bank (Absa) recorded a reduction in the number of complaints (down 36% year-on-year), 2021 saw the opposite occur. Only First National Bank (FNB) recorded a significant decrease in the number of cases opened in 2021.

According to Steyn, this can largely be attributed to the initiatives implemented by the bank’s CEO and staff to ensure that the bank aligns itself with the Treating Customers Fairly (TCF) principles and the requirements of the Conduct of Financial Institutions (COFI) Act.

“They made a concerted effort to look past the black letter of the law in respect of the merits of a complaint, and to apply considerations of fairness and reasonableness where the facts of the particular matter allowed for such considerations,” she said.

Specific attention was also given to the vulnerability of some customers and often settlements were made based on those considerations.

“This approach has certainly proven to be fruitful for the bank and has resulted in the reduced numbers that our office has seen,” said Steyn.

The ombud stressed that the number of files opened against a bank should not be regarded as an indication of that bank’s overall performance or the way that they deal with complaints, but is reflective of the varying size of the banks, as well as the different client profiles and product mixes.

“With fraud, the OBS has seen over the years that the fraudsters move from bank to bank targeting a certain group of consumers through phishing emails, vishing calls, etc. All of these factors impact on the number of complaints made against any bank,” she said.

This is how key banks performed over the last year:

  • FNB saw a significant drop from 2,197 complaints in 2020 to 1,452 complaints in 2021 (a 34% decrease);
  • Standard Bank saw an increase of 31.6% in the number of the complaints with a total number increasing from 1,572 complaints logged in 2020 to 2,070 in 2021;
  • Capitec bank also saw an increase in complaints from 1,259 cases in 2020 to 1,651 in 2021 representing a 31.1% increase;
  • Absa had an increase from 943 cases in 2020 to 1,068 cases in 2021 (a 13.3% increase); and
  • Nedbank accounted for 1,273 of the cases opened. An increase of 4.3%.
  • TymeBank saw a major increase in the number of complaints logged in 2021 with an increase of 870.8%. However, the public must remember that these complaints came off a very low base of only 24 complaints in 2020 to 233 complaints in 2021.
  • Discovery Bank decreased by 26.7%.


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The most complained-about banks in South Africa – and one that saw a dramatic turnaround