A recent American survey examined how consumers are talking about money to their friends, family and financial advisers. The survey results showed that women are more likely than men to purposely avoid the “money” topic, 55% versus 45%. Can this also be true in the way that people complain about financial issues?
In the midst of Women’s Month, the Ombudsman for Banking Services analysed their complaints to assess if there is a difference between complaints lodged by women vs men. The Ombud’s office statistic shows that they received a total of 3 785 formal cases for the year to date, and only 31% of the complaints lodged in this period were from women. The number of men and women utilising banking services is much more even, so why the disparity? Does it therefore relate to the avoidance of talking about money?
The Ombudsman for Banking Services, Reana Steyn, said that this may be an indication that either women are smarter than their male counterparts when it comes to banking products and services, or that they just complain less. “Regardless, there is always room for improvement,” she said.
Analysing the complaints
Of the 1 173 complaints received from women, 21% related to internet banking, 10% to ATM disputes and 9% to personal loans. The overall statistics for the office list credit card fraud complaints as the second highest category, noting that it is not even on the list of the top three categories for women’s complaints.
The ombudsman also noted that “ATM and internet banking related complaints are about fraud, mainly phishing and card swapping, and complaints related to personal loans are about the balances on the accounts.”
A case study to illustrate
Mrs N obtained a personal loan from a bank and in terms of the agreement, her last payment was due to be made on 25 December 2018. Unfortunately, she experienced financial difficulty and in April 2015 she tried to make arrangements with the bank to pay a reduced instalment for a period of 6 months.
It subsequently transpired that the bank had extended the repayment term of her agreement for a period of 5 years. Mrs Naidoo disputed having requested, signed or agreed to a restructuring of her account.
The bank’s view was that she agreed to the rescheduling terms and conditions, as well as the amended loan repayment term and that it was not reversible.
The Banking Ombud investigated the matter and noted that section 116 of the National Credit Act provides that a credit agreement may only be amended if the amendment is reduced to writing and signed by the customer in confirmation of her agreement with the amendment. In this instance, the bank was unable to furnish this office with any proof that the complainant requested or agreed to the restructure of the loan account. Accordingly, the Ombud recommended that the bank adjust the loan account in order to place her in the same position she would have been in had the restructure not occurred. The bank agreed and an amount of R64 032.15, in respect of additional interest charged as a result of the restructure, was written-off from the outstanding balance.
Mrs N remained liable to settle the adjusted outstanding balance, which she was happy to do. Steyn advised that “it is important for bank customers to keep record of any discussions with the bank regarding changes made to their account. Bank customers must always request that such changes be reduced to writing to avoid misunderstandings – a tip for both you and your client.
Learnings from case studies and research
The National Credit Act is relatively new, and has undergone several changes of late. The ignorance of the law displayed in the case study noted above is simply not acceptable, and one has to wonder whether it was accidental or intentional. Making big bucks by fleecing the ignorant, while gladly forfeiting the illegal gains without any penalty is simply not an ethical business practice. A financial adviser found guilty of such a misdemeanor would have to cough up and face possibly losing his licence. Now that banks also fall under the Financial Sector Conduct Authority, we will be watching closely to see whether the same sauce is dished up for the gander AND the goose.
Another take away is that there is a difference between men and women’s financial behaviour. It is therefore important to understand these disparities in behavioural patterns. This will allow us to better serve our clients, no matter the gender and age.
Click here to access the Ombudsman for Banking Services website.
