How can we help you? Freeze your account, perhaps?
PAPERWORK. It’s a challenge at worst, a dull chore at best.
And the more official the request, the more complex — certified copies, commissioners of oaths, affidavits at police stations.
For those without utility bills in their own name, or bills under maiden names, the process can be exceptionally trying.
The good news is that amendments to the Financial Intelligence Centre Act (Fica) — aimed at fighting financial crime such as money laundering, tax evasion and terrorist financing — should make procedures less onerous for ordinary consumers by giving institutions more flexibility in managing their risks.
The act obliges banks, attorneys, estate agents and others to verify client identities, record transactions and keep details up to date.
The amendments, passed by parliament but still awaiting presidential approval, will force banks to pay far closer attention to people in prominent positions in the public sector and those in the private sector doing business with government.
The flipside is that banks could require less information from lowrisk customers (most of us) and will be able to use a greater variety of sources to confirm information.
Although Fica obligations are set in stone, each institution can set its own rules and procedures to meet such obligations, including deciding how often to update personal and business account information
It is these internal know-your-customer processes that too often go wrong, making an already trying formality even more burdensome.
In the past three years, South African banks have been fined tens of millions of rands for deficiencies in their control measures, including identifying and verifying customer details. Last month five banks were fined close on R35-million.
And that’s the legal stuff. Perhaps banks should also be punished every time they frustrate customers through sheer Fica-process incompetence. Like FNB did to Johannesburg reader Clem Angus and Capetonian Sonja Edridge.
Their stories are far from unique and it is important that shielded bank executives get to hear of the messups their staff make.
Like the bank employee at Fourways FNB who had to be collected from the branch by Angus and driven to his home to verify his address. The 69-year-old works from home and because his utility accounts are in his personal name and relevant invoices show only a postal address, the bank said a home visit was needed. Angus agreed following “muttering” from the bank about freezing his account.
“After two weeks of messing about, including internal arguments about which branch should be doing the job and that they didn’t have transport, I offered in desperation three times to collect a staff member, ferry them to my home, show them where I work, then return them to the branch,” said Angus. “A week later I did this at my own expense.”
After complaining to the bank, he received a standard cut-and-paste response about Fica requirements. No reference to having to fetch the employee, much less an apology.
When I took it up with FNB, spokeswoman Lwazi Stuurman admitted that “under no circumstances” were clients expected to transport FNB staff to verify information of any kind. “We are addressing this matter internally with the relevant staff member and regret the inconvenience caused.”
Angus, who has received no offer of compensation for his time and petrol, said that nearly a month after taking the employee to his home in midAugust, he got an SMS from FNB which read: “Thank you for your Fica docs. The transactional hold on the account . . . has been lifted”.
Cafe owner Edridge would consider Angus lucky. Her Fica fiasco nearly put her out of business.
In May she got a text message from the bank telling her she needed to TAKES THE BISCUIT: Sonja Edridge was reduced to tears by FNB’s Fica process Fica her business account. Her accountant immediately submitted the required documents. The next week, she got messages warning that her account would be suspended, and despite the bank agreeing that nothing was outstanding, she got yet another warning a short while later.
Edridge and her accountant went through everything with the bank again and were assured all was in order.
After more warnings followed she visited a branch to demand that it immediately sort out the matter as she was leaving for work in Grahamstown shortly. She was asked to sign a mandate and assured this was the final requirement.
But two days later, her account was frozen, just days before payday for her eight employees.
“FNB was not perturbed, only saying it had been escalated,” said the 45year-old mother of two.
She was intending to leave for Grahamstown, but had no access to funds with which to pay for the hired van, staff and ingredients for the food needed.
“I asked whether I could be allowed an overdraft on my personal account to compensate for the business account being frozen in order for me to operate. I was offered R5 000, not even one person’s wage.”
With her business “on the brink”, she visited another branch of the bank and demanded the account be unblocked. After lots of shouting and tears the account was unblocked.
Two weeks later the bank sent her an SMS telling her to submit her Fica documents along with an e-mail asking her to fill in another mandate. She e-mailed a bank executive that day in protest, outlining the blunders. When she received no response, she re-sent the e-mail and was told the initial one had never been received.
Despite being contacted by the bank’s mediation team “to tick the box”, there was no admission of guilt. Edridge said she was asked how the bank could “make peace” with her. She told the bank’s representative it was difficult to put a value on it.
A few days later a hamper of chocolate, fruit and dried fruit was delivered to her home. An unimpressed Edridge donated it to the Red Cross Children’s Hospital.
“They claim to know their customers,” said Edridge. “They don’t know me. I am a chef producing artisanal foods made from scratch with unprocessed ingredients — and they send me a basket of cheap sugary treats? And a note saying they would like to apologise for the inconvenience caused and want to restore the relationship.”
She said the bank’s validation process was badly run and disorganised.
Marcel Klaassen, head of sales at FNB Business, said an investigation showed Edridge’s address had changed and the address on file was not the same.
“There was a communication process implemented to address this, to ensure that the customer is given an opportunity to submit the necessary documentation,” said Klaassen.
“Regrettably, human error prevailed where we had asked the customer to resubmit documents she had already submitted.”
But neither Edridge’s home nor work address had changed. And an address discrepancy had never been mentioned to her.
Klaassen didn’t offer any explanation, saying: “We can confirm that the client’s information and documentation was last verified in 2012 and we needed to reconfirm her business operating address and have a signed mandate for our records.”
And to think we entrust these places with our money.
Tune in to Power 98.7’s “Power Breakfast” (DStv audio channel 889) at 8.50am tomorrow to hear more from Megan
Banks have been fined millions for deficiencies . . . including verifying and identifying customer details