The Ombudsman for Banking Companies (OBS) has revealed its annual report for 2020, revealing the connection between the nation’s largest banks and their purchasers.
In 2020, the OBS mentioned it opened a report 7,717 formal circumstances, in comparison with the 6,472 circumstances – a 19% enhance in complaints within the sector. Throughout 2020, the OBS mentioned it closed 7,230 circumstances in comparison with the 2019 closures of 6,133 – an 18% enhance.
As well as, the OBS recorded an much more vital enhance within the variety of referrals acquired in 2020. “Referrals are complaints acquired by the OBS from complainants who haven’t afforded the financial institution a chance to first resolve the problem with them.
“The OBS sends these issues to the banks on behalf of the customers for the financial institution to try to attempt to come to a decision. If the issue isn’t resolved straight with the financial institution, then the matter is transformed to a proper case which types a part of the reported statistics,” mentioned ombudsman, Reana Steyn.
A complete of 8,389 case referrals had been despatched again to the banks in comparison with the 4,709 that had been despatched again in 2019. Steyn identified that the rationale for this enhance could also be resulting from challenges folks confronted in getting maintain of their banks throughout lockdown when name centres had been overwhelmed.
“As a result of lockdown and subsequent ripple results, some financial institution prospects had been determined and got here straight to our workplace earlier than contacting the financial institution,” she mentioned.
Varieties of Complaints acquired in 2020
Web banking complaints decreased and is not the biggest class of complaints acquired – which had been the pattern over the previous two years. Present accounts is at present the class which is seeing the best variety of complaints.
Beneath are the top-ranking classes:
1. Present accounts
Present account complaints include complaints referring to fraud, charges and costs. Complaints referring to the financial institution’s failure to provide prior discover of account closures was additionally a significant explanation for complaints. Collectively, these issues account for 80% of the present account issues, mentioned Steyn.
In 2018 and 2019, these complaints made up 10% and 12% (respectively) of the complaints acquired. In 2020, there was an extra 7% enhance from 2019 complaints. A complete of 1,338 present account complaints had been opened in 2020 and in 465 (35%) of those circumstances, a discovering was made in favour of the complainants.
2. Web banking fraud
In 2018 and 2019, web banking complaints was the biggest class of complaints accounting for 22% and 18% of complaints (respectively). In 2020, the quantity dropped right down to 13%.
The OBS closed 981 web banking fraud circumstances in 2020 versus the 1,292 in 2019. 73% of those complaints had been resolved in favour of the banks, and 197 (27%) had been in favour of the financial institution prospects.
3. Credit score Card complaints
Bank card complaints decreased from 15% in 2019 to 11% in 2020. Regardless of this, it nonetheless maintained the third place of prime complaints.
A complete of 895 credit score card-related complaints had been closed by the OBS in 2020 and 76% had been resolved in favour of the financial institution. Round 1 / 4 of the circumstances (266) had been resolved in favour of customers.
ATM associated complaints
ATM complaints accounted for 9% (732 circumstances) of the circumstances opened in 2020. That is down by 4% from 2019 the place ATM complaints made up 13% of circumstances. The vast majority of the problems raised round ATM complaints had been nonetheless fraud associated. 84% of those circumstances (617) had been resolved in favour of the financial institution, and solely 16% (115 circumstances), had been present in favour of the patron, the OBS mentioned.
Steyn identified that the widespread thread in all of the above-mentioned classes was that almost all of the customers, sadly, fell sufferer to fraudulent scams.
She mentioned that the rationale why the vast majority of these issues had been present in favour of the banks was that after a full investigation was performed, the OBS was pressured to conclude that the fraudsters managed to govern the customers into transferring funds into their account or to provide them their confidential banking particulars which then enabled the fraudulent transactions.
Steyn mentioned that the OBS recovered R16 million which was paid again to customers. She mentioned that almost all of those funds had been direct financial losses. Nevertheless, by her workplaces’ intervention, these losses had been recovered and refunded.
Covid-19 associated complaints
As a standalone class, Covid-19-related issues made up 2% (143) of circumstances opened in 2020. Nevertheless, Steyn defined that Covid-19-related complaints had been reported within the sub-categories by all the primary classes, particularly those talked about beneath.
Private mortgage complaints made up 11% (831 circumstances) of the complaints acquired in 2020 which is in keeping with the earlier yr. The OBS present in favour of the complainants in 31% (225) of the circumstances.
Mortgage mortgage finance complaints accounted for 8% (583) of the complaints acquired of which 72% (428 circumstances) had been in favour of the financial institution whereas 28% (155 circumstances) was within the financial institution prospects’ favour.
Car finance accounted for 7% (454 circumstances) of the complaints acquired, only one% lower than earlier two years. In 78% (367) of those complaints, the OBS discovered within the banks favour. The OBS present in favour of the complainants in 22% (87) of the complaints.
Most complaints opened in 2020 had been from Gauteng at 50% (44% in 2019), adopted by Western Cape at 17% (15% in 2019), and Kwa–Zulu Natal at 12% (13% in 2019).
Most complaints recorded had been from folks over the age of 40 and associated to present accounts, bank cards and web banking fraud, the Ombud mentioned.
In all age classes, web banking dropped from being essentially the most complained about class and was changed by present account complaints which, in most situations, was additionally resulting from fraud.
Performances by financial institution
There was a big enhance in circumstances for many banks when in comparison with 2019. Solely Absa Financial institution recorded a discount in complaints (down 36% year-on-year).
Steyn cautioned that the variety of information opened in opposition to a financial institution shouldn’t essentially be thought to be a sign of that financial institution’s general or complaints dealing with efficiency.
She famous that banks differ in measurement, shopper profile and product combine. As well as, fraudsters appear to periodically goal sure teams of shoppers. All of those components impression on the variety of complaints made in opposition to any given financial institution.
The next variety of formal circumstances had been opened in opposition to the 5 massive banks in 2020. The person will increase must be seen in mild of the general enhance in variety of complaints acquired by the OBS:
- Absa financial institution noticed the variety of complaints opened in opposition to it with the OBS lower from 1,483 in 2019 to 943 circumstances in 2020 (a 36% lower from the earlier yr);
- First Nationwide Financial institution had 2,197 complaints opened in opposition to it (a 22% enhance from 2019);
- Customary Financial institution had 1,572 complaints opened in opposition to it (a rise of 28% within the variety of the complaints);
- Nedbank had 1,217 circumstances opened (a rise of 10%); and
- Capitec Financial institution had 1,259 circumstances opened in opposition to it (a 39% enhance).