The Ombudsman for Banking Services (OBS) has published three case studies to highlight how it can hold banks accountable if they fail to adhere to fair and reasonable practices.
Reana Steyn, the ombudsman, said one of the core mandates of her office is to ensure that the banks comply with their undertaking to provide South Africans with safe, secure, and reliable banking products and services. In the Code of banking Practice, the banks also undertake to act fairly, reasonably, and ethically towards their customers.
Where the banks have failed consumers, the OBS has, for more than 20 years, provided relief to aggrieved customers, Steyn said.
If you have a dispute with your bank, follow the correct procedure. Draw the dispute to the bank’s attention and allow it 20 days to respond to your query. Consumers can also approach the OBS, which will raise a dispute with their bank on their behalf.
“Consumers need to give the bank every opportunity to address and settle the dispute amicably. Consumers should only approach the OBS to make a complaint after the bank refuses to settle a dispute,” Steyn said.
There is no charge for lodging a complaint with the OBS.
Steyn points out that although banks strive to provide a perfect service and product delivery, no bank has made an undertaking that mistakes will not happen. Expectations that banks are infallible are unreasonable because human error and technological failures will always exist.
The OBS can assist you only if your complaint:
- Relates to products or services provided by the bank;
- Involves a claim of R2 million or less; and
- Arose within the past three years.
Entities such as companies, corporations, partnerships, and trusts may lodge a complaint if the person making the complaint is authorised to do so and the annual turnover of the business or group of businesses is R10m or less.
The OBS cannot assist if your complaint involves:
- A bank’s commercial decision about lending or credit, interest rates or bank charges, unless there has been maladministration on the part of your bank;
- A matter that would more appropriately be dealt with by a court of law or another dispute resolution process; or
- A matter that is or has been the subject of litigation, subject to certain exceptions.
Click here to visit the OBS’s website and for more information about how to lodge a complaint.
Three case studies
Delays in the finalisation of a deceased estate
One of the complainant’s parents died in 2016, and the other died in 2021. The bank was appointed executor of the deceased estates.
There was a delay in winding up the estates, and the complainant lodged a complaint with the OBS. He wanted the bank to waive its executor’s fees because the service provided was inadequate.
The bank said the delays were because of staff resignations in its deceased estate department, as well as delays at the Office of the Master of the High Court that were beyond its control. The bank offered to make a 10% (on the first estate) and 25% (on the second estate) concession on its fees.
Upon investigation, the OBS found that, for three years after one of the bank’s staff members resigned, nothing was done on the 2016 deceased estate account. Further, the bank did not provide the complainant with any updates on the progress of winding up the estate. The delays with the 2021 deceased estate were less severe because it had been reported to the Master more recently.
The OBS ruled that the bank’s actions were prejudicial to the complainant in that there was a clear breakdown of communication and service delivery. The OBS recommended that the bank increase its fee concession on the 2016 deceased estate account to 50%. The bank agreed.
Failure to act timeously to prevent loss
The complainant paid R8 758 to a nominated bank account, believing she was buying a food truck. However, she discovered that she had been defrauded and approached her bank to have the payment reversed.
In its response to the OBS, the bank advised the complainant to log a case of fraud with the bank’s fraud department. The branch at which the complainant asked for the funds to be reversed provided no further assistance. The complainant called the bank’s fraud department two days later to report the matter.
Fraud cases are regarded as time-sensitive by the OBS. However, it was uncertain why the branch did not urgently assist the complainant in contacting the bank’s fraud department to open a case of fraud. Upon investigation, it was discovered that if the branch had assisted the complainant, her funds would have been recovered because the fraudster had not withdrawn them. Therefore, the OBS recommended that the bank offer the complainant a full refund.
Incorrect advice
The complainant bought a vehicle that the bank financed. He was later involved in an accident and the vehicle was written off. After claiming from insurance, the complainant was left with a shortfall of R27 713 on his vehicle finance.
An arrangement was concluded with the bank regarding the financing of the shortfall. Interest would accumulate on the decreasing shortfall balance.
After a few months, the complainant approached his bank and complained about being overcharged. He pointed out that the interest levied on the account did not correspond with the interest agreed to in the arrangement. In response, the bank said the advice given to the complainant in the arrangement was incorrect.
Upon investigation, the OBS pointed out that it did not matter if there was an error in the original advice given to the complainant because the bank’s failure to provide the correct advice should not be prejudicial to the complainant.
The OBS recommended that the bank adhere to the terms of the original arrangement. As a result, the bank paid back R17 465.35 to the complainant.
