The Ombudsman for Banking Services (OBS) annual report reveals that it opened 7 717 formal cases in 2020 – a new record.
This is a 19% increase on the prior year, despite the Covid-19 lockdown. It received nearly 40 000 calls to its call centre in the year, a 49% increase on 2019.
Only one of the six large retail banks saw a decline in the number of complaints versus the prior year. The ombud notes that increases need to be seen “in light of the overall increase in number of complaints received” by the OBS.
FNB had 2 197 complaints opened against it, the highest among the five banks.
This is a 22% increase from 2019, which is roughly in line with the overall increase in complaints.
Standard Bank had 1 572 complaints opened against it, a 28% increase from 2019, while complaints against Nedbank increased by 10% to 1 217 in 2020. Absa saw a 36% decline in the number of complaints, from 1 483 in 2019 to 943 last year.
Listen to Nompu Siziba’s SAfm Market Update with Moneyweb interview with Kwanda Vabaza – Adjudicator at the Ombudsman for Banking Services:
Capitec Bank had a similar number of complaints to Nedbank (1 259), but this is a 39% increase on 2019. And while African Bank received fewer complaints (255) than the other five banks, this was a 69% increase on 2019.
Ombud Reana Steyn says the number of files opened against a bank should not necessarily be regarded as an indication of that bank’s overall or complaints-handling performance. She also highlighted that banks vary in size, client profile and product mix.
In addition, fraudsters seem to periodically target certain groups of customers.
Steyn says all these factors impact on the number of complaints made against any given bank.
A clear positive is that the percentage of internet banking complaints out of all those received has “steadily decreased”. In 2020, this is no longer the largest category, which is surprising given the significant structural shift in the market accelerated by lockdown.
The top categories for 2020:
- Current accounts (19% of complaints)
- Internet banking (13%)
- Credit cards (11%)
- Personal loans (11%)
- ATM (9%)
The OBS says most current account complaints related to “fraud, fees and charges, and the bank not giving notice of account closures in more than 80% of the matters”.
Common thread – scams
Steyn says the “common thread” in the complaints related to the top four categories was that the majority of the consumers unfortunately fell victim to fraudulent scams.
The bulk of these matters were found in favour of the banks.
This was because, after a full investigation, “the OBS was forced to conclude that the fraudsters managed to manipulate the consumers into transferring funds into their account or to give them their confidential banking details which then enabled the fraudulent transactions”.
Covid-19-specific matters accounted for only 2% of all complaints received, although the ombud says other categories contained Covid-19-related complaints, especially the personal loan, mortgage loan and vehicle finance ones.
For and against
Of the 7 230 cases closed in 2020, 28% were closed in favour of the complainant with 72% in favour of the bank.
The OBS says the “72% closure rate in favour of banks shows the fairness with which the banks and their internal resolution departments treat complainants and their complaints”.
It managed to recover a total of R16 million, which was paid back to customers. Most of these were direct monetary losses in cases where the ombud had found in favour of the complainant.
The ombud closed 98% of cases (“files’) within six months.
This was less than 2019 (and its resolution times were slightly longer), but this is to be expected given the impact of the hard lockdown.