Fraud related to current accounts and internet banking remains high on the list of complaints to the Ombudsman for Banking Services (OBS). Two other categories of complaints on the OBS’s radar are delays in finalising deceased estates and the collection of prescribed debt, according to the office’s 2022 annual report.
Nedbank and Capitec had the biggest increases in the number of complaints in 2022, by 18% (1 273 in 2021 to 1 508 in 2022) and 11% (1 651 to 1 826), respectively.
Complaints to Standard Bank dropped by 31% (2 070 to 1 385) and to First National Bank (FNB) by 21% (1 452 to 1 147).
Absa had the lowest number of cases among the big banks and remained level (1 068 compared with 1 063 in 2021).
Reana Steyn, the ombudsman, emphasised that the number of files opened per bank is not indicative of an individual bank’s complaints-handling performance or its performance in general.
Banks vary considerably in size, client profile, and product mix, which affect the number of complaints made against a bank.
“Comparing the number of clients, the growth of the client base for some and more importantly, the number of successful banking transactions taking place every day, the low total number of complaints at the OBS could be indicative of the fact that things mostly work the way they should in the South African banking space,” Steyn said.
An indicator of how well banks handle complaints is their conversion rate of premature cases to formal complaints. According to the report, African Bank saw 72% of referrals converted to formal complaints, followed by Nedbank (64%), Tyme and Bidvest (both 53%). FNB converted only 34%.
The bank with the best average turnaround time (referring to the number of days it took to close complaints, on average) was Capitec (58 days). Standard Bank had the worst average turnaround time (73 days).
Capitec also had the highest percentage of cases decided in its favour (85%), while Nedbank had the lowest (72% in its favour).
Cases in favour of consumers
Of the cases closed in 2022, 23% were resolved in favour of the customer: 16.1% of cases were fully or partially upheld in the complainant’s favour; in 6.4% of cases, no award was made but information or an explanation was provided.
One category of complaints resolved mostly in favour of the customer was estates and trusts – there were 135 cases, of which 55% went the way of the complainant.
Overall, the OBS recovered R30 350 173 for customers, an increase of about R10m compared with 2021. Steyn said the increase was largely because of the rise in complaints about deceased estate delays and internet banking, each of which involved large amounts.
Key statistics
The year 2022 saw a 13% year-on-year increase in referrals, which are premature complaints from customers who contact the OBS about a dispute that has not been considered by the dispute department in the bank. The OBS assists consumers to log the complaint and refer it to the relevant bank. The complaint is either satisfactorily resolved by the bank or converted into a formal complaint.
Although referrals were up, there was a 5% decrease in formal cases opened compared with 2021 (from 8 257 to 7 869). Case closures followed the same trend: from 8 150 to 7 574, a drop of 7%.
“This could be attributed to the growing industry trend to keep complaint numbers down through resolving disputes internally at an early stage. There is also a drive to improve customer experience and avoid negative public sentiment,” Steyn said. “However, our overall active case numbers have remained high, with an average of 1 424 cases open at any given time.”
Another positive trend was the drop in the average number of days taken to close cases, which improved from 70 days in 2021 to 67 days in 2022. Just over half of cases (52%) took less than two months to resolve; 37% took between two and four months; and the remaining 11% took more than four months.
Types of complaints
Continuing the trend from previous years, complaints about current accounts and digital banking made up the two largest categories of cases opened in 2022, and most cases in both categories involved fraud of one type or another.
Current account cases increased by 3% to 22% of total cases. Almost two-thirds (65%) of these were related to fraud.
Digital banking cases also increased by 3%, to 17%. “The biggest sub-categories of complaints in this regard are mobile banking fraud and vishing,” Steyn said.
Vishing, or voice phishing, is when a fraudster phones a customer or leaves voice messages purporting to be from a reputable company, to glean personal information, such as bank details and credit card numbers.
Complaints about personal loans made up 13% of total cases opened, while credit cards were the subject of 7% of total complaints.
Steyn said it appears the banks are settling more of the credit card-related matters themselves, as her office opened 7% fewer of these cases in 2022.
ATM-related complaints, which in pre-Covid years featured among the top categories, dropped even further, from 8% in 2021 to 5% of complaints in 2022, an indication that fewer consumers make use of this channel, and fraudsters moved their targets elsewhere.
There was a 114% increase in complaints about delays in finalising estates (257compared with 120 the year before.
Steyn said complaints about banks collecting on prescribed debts have increased substantially year on year: in 2021 this category made up 1.4% of complaints, while in 2022 it made up 4.5% of all complaints.
