Online banking complaints on the rise

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Internet banking complaints increased the most in 2021 according to the Banking Ombudsman, who also managed to put more than R19,400,000 back into consumers’ pockets, although only 27% of complaints were resolved in favor of consumers.

According to the Ombudsman’s annual report, his office opened a record 8,257 complaints in 2021, an increase of 7% over 2020 and 28% more than in 2019.

More than 10,330 complaints were forwarded to banks because consumers did not first contact their banks to resolve their complaints.

Cases are only converted to formal cases if the bank cannot solve the problem.

In 73% of resolved cases, the conclusions were in favor of the banks, explains Reana Steyn, the ombudsman. This means that in 5,846 (72.7%) cases, his office found that the consumer had no case based on legal or equitable grounds.

When consumers had a case, the banks involved were held 100% liable for the claims in 15.9% (1,276) of the cases, while in 4.5% (363) of those complaints, the banks were found partially responsible. In 1,639 (20.4%) cases, the Ombudsman found wrongdoing on the part of the banks.

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This is what consumers are complaining about

Steyn says many complaints involved bank customers who were victims of various types of fraud, but internet banking complaints regained their category position with the most complaints in 2021, accounting for 19% of total open complaints.

“This is an alarming 6% increase from 2020 and a worrying statistic as it runs counter to progress made in 2020, when the number of internet fraud victims dropped dramatically to a record high of 13% of the total.”

Other complaints related to service, poor administration, over-indebtedness, account closures, and disputes over fees or interest rates.

Here are the main complaints:

  • current account: 16% of total files opened, a decrease of 3% compared to 2020
  • personal loan: 11%, same as previous year
  • mortgage financing: 8%, same as the previous year
  • credit card: 9%, down 2%
  • car financing: 8%, down 2%
  • ATM: 7%, a decrease of 2%.

Steyn points out that in previous years, such as in 2015, ATM complaints made up the largest number of complaints, but as people now choose technology to do their banking, internet banking has taken over. , obviously heavily influenced by the pandemic.

In the majority of these complaints, the losses and inconvenience could have been avoided if consumers were more skeptical of fraudsters posing as bank staff.

“It’s important that consumers protect their confidential banking information and never accept help from strangers at the ATM.

Consumers should also be more involved in managing their accounts by constantly checking their account statements and turning to banks for help at the first signs of financial difficulty.

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Complaints about specific banks

With regard to bank-specific complaints, the ombudsman’s office noted a notable increase in the number of cases for most banks compared to the previous year.

In 2020, Absa saw a decline in cases (down 36%), but 2021 was the opposite.

Only the First National Bank (FNB) recorded a significant drop in the number of files opened in 2021.

According to Steyn, this dramatic decrease can be largely attributed to the initiatives implemented by the bank’s CEO and staff to ensure that the bank aligns with the Principles of Fair Treatment of Customers (TCF) and the requirements of the Conduct of Financial Institutions Act (COFI).

Here are the formal cases opened against the banks in 2021:

  • ETFs: 1,452 complaints, down 34% from 2,197 in 2020
  • Standard Bank: 2,070 complaints, an increase of 31.6% compared to 1,572 in 2020
  • Capitec: 1,651 complaints, an increase of 31.1% compared to 1,259 in 2020
  • Absa: 1,068 complaints, an increase of 13.3% compared to 943 cases in 2020
  • Nedbank: 1,273 complaints, an increase of 4.3%
  • TymeBank: 233 complaints, an increase of 870.8% from 24 in 2020 (note that these complaints came from a very low base in 2020)
  • Discovery Bank: 55 complaints, down 26.7% from 75 in 2020.

Steyn says consumers should remember that the number of cases doesn’t indicate the bank’s overall performance or how well it handles complaints.

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Vulnerable consumers

The ombudsman’s office also collected statistics on vulnerable consumers for the first time in 2021:

  • 70% were classified as such because of their age
  • 22% of people aged 75-85 were classified as vulnerable due to a life event such as retrenchment or death of a spouse/partner
  • 5% of vulnerable consumers are over 85 years old.
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