The banking ombudsman annual report for 2014 shows which banks in South Africa are drawing the most complaints, and where customers are experiencing the most problems.
According to the report, 4,479 cases were opened in 2014 relating to the banking services sector, down from 4,613 cases in 2013.
The total number of cases closed in the year, including unresolved cases from the previous year, amounted to 4,565.
Inquiries, however, increased by over 2,200 from 2013, totaling 22,239 for the year.
Overall, 2,879 rulings were made in favour of the banks – 69% of total complaints, meaning only 31% of all investigations were in the consumer’s favour.
“In a period that saw far-reaching regulatory changes approaching realisation amid the very challenging operating environment that is global banking, South African banks again proved to be resilient, sound, and trustworthy,” said OBS chairperson John Myburgh.
Most complained about banks
All but one major South African bank saw fewer complaints in 2014 than in 2013.
Standard Bank’s complaints shot up over 66% from 980 in 2013 to 1,630 in 2014.
Absa, FNB, Capitec, and Nedbank all saw their complaint numbers drop, with Absa experiencing the biggest decline.
|Bank||2013 Complaints||2014 Complaints||YoY Change|
|Standard Bank||980||1 630||66.3%|
The ombudsman noted that the demographics and structures of all the banks differ greatly, and as such the complaints reflect various client profiles, product mixes, and liability to the public.
“The number of files opened in 2014 per bank is not necessarily indicative of the individual bank’s customer complaints handling performance or its performance in general,” the report noted.
Phishing on the rise
Looking at which areas of banking drew the most complaints, ATMs were by far the most troubling service, followed by internet banking.
The number of ATM cases increased by 7% year-on-year. In this category, card swapping increased dramatically – from 27% of complaints in 2013 to 60% of complaints in 2014.
Fraudulent ATM complaints – where the consumer is the victim of fraud, compared to ‘friendly fraud complaints’ – increased by 18%.
Internet banking complaints remained relatively stable at 17% of all complaints, but phishing complaints increased from 30% to 45%.
Cybercrime is costing the country about R5.8 billion a year, the group said
Ombudsman Clive Pillay points out that, although historically, there has been an almost equal split between cases ruled in favour of banks and those going the way of consumers, unauthorised debit orders are an area where banks are invariably never at fault.
An instance where a bank would be liable, for example, is where the bank is unable to furnish an authenticated mandate.
“A debit order is an agreement between a customer and a service provider that is outside the bank’s control,” he said. “A bank may not stop a debit order.”
“The real issue is not the money involved – in most cases, the amounts are small. Rather, unauthorised debits demonstrate a weakness in the system that allows customers’ personal information to be compromised. The Protection of Personal Information Act should plug these leaks.”
Getting money back
According to the ombudsman, approximately R9 million was recovered from banks and paid back to customers in 2014, down from R23 million in the previous year.
This drop was due, in part, to an ongoing test case relating to internet banking.
“Fewer findings in favour of consumers in ATM complaints and the number of internet banking complaints placed on hold pending the outcome of the test case, impacted significantly on the total recovered from banks,” it said.
According to the ombudsman, if the judge overseeing the internet banking test case finds that there is indeed a duty of care on a beneficiary bank when opening an account, “then it is likely that 19% more awards would be made to consumers”.