Banking Ombud 2020 Annual Report sees notable increase in complaints

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“The year in review was an unprecedented and difficult one for the banking industry as well as its customers. Surprisingly, the Office did not receive many complaints relating to the financial crisis. In the early stages, the Office did however receive numerous calls and email enquiries from bank customers simply looking to be pointed in the right direction,” Advocate John Myburgh, Chairman of the Ombudsman for Banking Services (OBS), comments in the foreword of the just-released OBS Annual Report.

According to the Ombudsman, Reana Steyn, this year’s numbers speak for themselves, with a 19.2% increase in formal cases opened and an 18% increase in number of cases closed. “In addition to the formal cases, we also logged, dealt with correspondence on, and closed 8 434 referrals, i.e. complaints which we sent to the Banks to try and resolve.”

Steyn was especially pleased to announce that of the OBS managed to recover R26 million which was paid back to consumers. Steyn explained that most of these funds were direct monetary losses. However, through her offices’ intervention, these losses were recovered and refunded.

Types of complaints received

Steyn points out that a positive trend is that internet banking complaints decreased and is no longer the largest category of complaints received (which has been the trend over the past two years). Current account complaints are currently the category which is seeing the highest number of complaints. Here are some of the top-ranking categories:

Current accounts:

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.

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, it was encouraging to see the number drop to 13%. According to Steyn, this decrease may be attributed to the efforts of the banking industry, as well as the OBS, who continuously provide education and awareness about fraud and scams in the internet banking space.

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

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.  Twenty four percent 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. Eighty four percent of these cases (617) were resolved in favour of the bank, and only 16% (115 cases), were found in favour of the consumer.

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. While urging consumers to always remain vigilant about banking scams, Steyn indicated that the OBS would continue to provide the much-needed education and awareness when it comes to these scams.

Insurance related complaints:

Insurance complaints increased from 1% to 2% with 104 cases reported. Sixty-eight percent (79) of these complaints were resolved in favour of the banks, and 32% (25) were in favour of the bank customers.

Treating customers fairly

The report also highlights compliance to the six TCF outcomes. Although the provision of clear information still fell short in the insurance category, service levels failed across all categories, as the delivery on expectation and service levels weakened.

Covid-related cases

Last year, Steyn predicted that the issue of over-indebtedness and lack of ability to pay back credit agreements will rise as a result of the financial turndown. 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 Personal loan, Mortgage loan finance and Vehicle finance complaints.

Click here to download the detailed report.

Banking Ombud 2020 Annual Report sees notable increase in complaints

Posted on by

“The year in review was an unprecedented and difficult one for the banking industry as well as its customers. Surprisingly, the Office did not receive many complaints relating to the financial crisis. In the early stages, the Office did however receive numerous calls and email enquiries from bank customers simply looking to be pointed in the right direction,” Advocate John Myburgh, Chairman of the Ombudsman for Banking Services (OBS), comments in the foreword of the just-released OBS Annual Report.

According to the Ombudsman, Reana Steyn, this year’s numbers speak for themselves, with a 19.2% increase in formal cases opened and an 18% increase in number of cases closed. “In addition to the formal cases, we also logged, dealt with correspondence on, and closed 8 434 referrals, i.e. complaints which we sent to the Banks to try and resolve.”

Steyn was especially pleased to announce that of the OBS managed to recover R26 million which was paid back to consumers. Steyn explained that most of these funds were direct monetary losses. However, through her offices’ intervention, these losses were recovered and refunded.

Types of complaints received

Steyn points out that a positive trend is that internet banking complaints decreased and is no longer the largest category of complaints received (which has been the trend over the past two years). Current account complaints are currently the category which is seeing the highest number of complaints. Here are some of the top-ranking categories:

Current accounts:

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.

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, it was encouraging to see the number drop to 13%. According to Steyn, this decrease may be attributed to the efforts of the banking industry, as well as the OBS, who continuously provide education and awareness about fraud and scams in the internet banking space.

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

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.  Twenty four percent 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. Eighty four percent of these cases (617) were resolved in favour of the bank, and only 16% (115 cases), were found in favour of the consumer.

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. While urging consumers to always remain vigilant about banking scams, Steyn indicated that the OBS would continue to provide the much-needed education and awareness when it comes to these scams.

Insurance related complaints:

Insurance complaints increased from 1% to 2% with 104 cases reported. Sixty-eight percent (79) of these complaints were resolved in favour of the banks, and 32% (25) were in favour of the bank customers.

Treating customers fairly

The report also highlights compliance to the six TCF outcomes. Although the provision of clear information still fell short in the insurance category, service levels failed across all categories, as the delivery on expectation and service levels weakened.

Covid-related cases

Last year, Steyn predicted that the issue of over-indebtedness and lack of ability to pay back credit agreements will rise as a result of the financial turndown. 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 Personal loan, Mortgage loan finance and Vehicle finance complaints.

Click here to download the detailed report.