Ombud records drop in internet banking fraud cases

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In 2020, internet banking fraud litigation rose from the largest complaint category for the first time in two years, according to the Banking Ombudsman (OBS).

And this despite the past year when digital banking has grown due to the COVID-19 pandemic.

The OBS is the independent office that aims to resolve customer complaints about banking products and services.

On Wednesday, the office released its annual report report for 2020, noting the positive trend in internet banking fraud complaints.

According to the report, the category of current account complaints records the highest number of complaints.

The OBS reports that in 2018 and 2019 Internet banking complaints were the largest category, accounting for 22% and 18% of complaints, respectively.

In 2020, it was encouraging to see the number drop to 13%, said banking mediator Reana Steyn.

Steyn points out that the decline can be attributed to the efforts of the banking industry, as well as the OBS, which she says continuously provides education and awareness of fraud and scams in the internet banking space.

“The OBS closed 981 Internet banking fraud cases in 2020, up from 1,292 in 2019. Seventy-three percent of these complaints were resolved in favor of banks and 197 (27%) in favor of bank customers.

The ombudsman’s office said it was successful in recovering R16 million in 2020, which was refunded to consumers. This, he notes, is about R5 million less than in 2019.

“This can be attributed to the decrease in Internet banking business, which normally represented larger amounts claimed than other categories of litigation,” notes an OBS official.

Last year, the office opened a total of 7,717 formal complaint files, up 19% from 6,472 files in 2019. It closed 7,230 files, an increase of 18% over the previous year. ‘last year.

The top five categories of complaints include checking accounts, Internet banking, personal loans, credit cards and ATMs.

When it comes to bank performance, OBS’s annual report notes that only Absa is the bank to record a reduction in complaints – down 36% year-on-year.

However, Steyn cautions that the number of cases opened against a bank should not necessarily be taken as an indication of that bank’s overall performance in handling complaints.

She points out that banks vary in size, customer profile and product line. In addition, fraudsters seem to periodically target certain groups of customers. All of these factors have an impact on the number of complaints filed against a given bank.

According to the office, Absa has seen the number of complaints opened against her with the OBS drop from 1,483 in 2019 to 943 cases in 2020, down 36% from the previous year.

The First National Bank, according to the OBS, had 2,197 open complaints against it, an increase of 22% from 2019. Standard Bank had 1,572 open complaints against it, an increase of 28%.

In addition, Nedbank opened 1,217 cases, an increase of 10%, and Capitec Bank opened 1,259 cases against it, an increase of 39%.

“As we move through this difficult environment, we encourage consumers to have an open relationship with their bank and know that they can come to OBS if they cannot be assisted by their bank. Additionally, we urge consumers to be aware that the current environment is highly conducive to fraud. ”


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