Complaints against banks up

The Ombudsman for Banking Services received a record number of complaints last year when it opened 7 717 formal cases – an increase of 19% compared to 6 472 cases opened in 2019.

During 2020, the ombud also closed 7 230 cases, an increase of 18%, compared to 2019 when 6 133 were closed.

A total of 8 389 case referrals were also done, where consumers did not complain to their banks first. In 2019, a total of 4 709 were sent back.

According to ombud Reana Steyn, this could be due to consumers battling to get hold of their banks during the lockdowns.

During 2020, the ombudsman managed to recover R16 million which was paid back to consumers.

In a change from previous years, internet banking complaints decreased in 2020 and is no longer the largest category of complaints as in 2018/19.

Current account complaints have become the category with the highest number of complaints.

The complaints:

1 338 were relating to fraud, fees and charges, as well as banks’ failure to notify consumers of account closures.

These complaints made up 80% of the current account matters. In 2018, these complaints made up 10% of complaints and 12% in 2019. In 2020, there was a further 7% increase from 2019 complaints.

In 465 (35%) of these cases, a finding was made in favour of the complainant.

Internet banking fraud only made up 13% of the cases in 2020. While it was 22% in 2018 and 18% in 2019.

A total of 981 internet banking fraud cases were closed in 2020, compared to 1 292 in 2019 – 73% of which were resolved in favour of the banks and 197 (27%) in favour of the consumer.

Credit card complaints decreased from 15% in 2019, to 11% in 2020, but these remained in the third position.

A total of 895 credit card complaints were closed in 2020 and 76% were resolved in favour of the bank, while 24% (266) were in favour of consumers.

ATM complaints accounted for 9% (732 cases), 4% less than in 2019, when ATM complaints made up 13% of cases.

Most of the issues raised were still related to fraud. A total of 84% (617) were resolved in favour of the bank and only 16% (115 cases) in favour of the consumer.

“The reason why the majority of these matters were found in favour of the banks was that – after a full investigation – we were forced to conclude the fraudsters manipulated the consumers into transferring funds into their accounts or to give them their banking details to use in fraudulent transactions,” said Steyn.

She cautions the number of files opened against a bank doesn’t necessarily reflects its handling of complaints.

Complaints against Absa decreased from 1 483 in 2019, to 943 cases in 2020 (36% decrease)

FNB had 2 197 cases (22% increase) Standard Bank had 1 572 cases (28% increase)

Nedbank had 1 217 cases (10% increase) Capitec Bank had 1 259 cases (39% increase).