It pays to check your bank statements regularly
Banks are a frequent source of frustration. They have carte blanch to levy fees and penalties on your account and do so indiscriminately, even when they’re to blame for the error. To this day the only “bank error in your favour” is safely tucked away in the popular Monopoly board game. And there’s no sign of an end to bank’s arrogance either. Even the feared Competitions Commission has given up. Their initial report into bank pricing practices has long been forgotten and the Commission has apparently decided that the banks are too big to take down.
But don’t despair. There is someone you can turn to after you’ve exhausted every other avenue. You can take your case to the Ombudsman for Banking Services where you’ll find a sympathetic ear. The Ombudsman recently published details of two cases where unhappy bank consumers ‘won’ compensation.
Don’t let banks charge you for their neglect
In the first case, Mr David applied to his bank for a credit card during January 2008. He completed an application form and provided his cheque account number for the collection of all debits to his credit card by monthly automatic payment order. The bank made a mistake when capturing these details with the result subsequent automatic payment orders were returned. And we all know what happens when a bank doesn’t get its money. David’s credit card account was debited with finance charges, penalty fees and Vat.
Upon learning of the error (in May 2008) David made arrangements to settle the balance on the account and instructed the bank to close his credit card account. But by August 2008 he was still being billed finance charges, penalty interest and Vat on the unsettled balance (made up of finance charges, penalty interest and Vat due to the bank error) on his as yet unclosed credit card. David had no choice but to take the case to the office of the Ombudsman. The Ombudsman “intervened and the bank admitted its mistake.” The complainant was refunded for all amounts incorrectly debited and the account was closed per his initial request.
The looming ‘cession’ nightmare
The second case forwarded to the Office of the Banking Ombudsman should come as a wakeup call to hundreds of South African account holders. The case deals with the cession of an insurance policy to the bank as security for an overdraft, but could just as well apply to the cession of any guarantee against any loan agreement.
Almost a decade ago (in 2000) Miss Kay applied for an overdraft facility on her bank account. The facility was granted after Kay furnished the bank with insurance policies as security, over which cessions were registered to the bank. Kay decided to close her bank account on the 9th November 2007. The first step was to settle the outstanding balance, which she duly did. Leaving nothing to chance she notified the bank in writing to close the account and to uplift the cession over her insurance policies. But things don’t always go to plan in the murky world of banking administration.
Six months later Kay noticed her account was still active. To her dismay monthly charges had accumulated on the account since the 9th of November, including penalty fees for something referenced as an “overdraft excess.” Upon enquiry she determined the cessions on her insurance policy were still registered to the bank too! Kay wasted little time in taking this matter to the banking industry consumer watchdog. “Upon investigation by the Office of the Ombudsman, the bank acknowledged that there may have been service failures in terms of the banks handling of Miss Kay’s instructions and accordingly refunded her all the bank fees which had been debited to her account and also, in addition thereto, the bank made a cash goodwill payment to her.”
How to keep your bank honest
We’d like to make a few suggestions for the thousand of you who have reached the end of your banking tether. The first is that you undertake a complete analysis of all the transaction on your bank and credit card statements on a monthly basis. It’s a worthwhile exercise and should help you flag any unauthorised transactions (such as bank fraud), spot subscriptions that you’ve cancelled and are still paying for and prevent the bank from charging you unnecessary fees.
The second thing you should do is keep a complete record of all correspondence with your bank. If you deal with the call centre make sure you get a customer reference number or a name and department at the very least. Make sure that any account critical instructions are given in writing – a fax or email should be sufficient – though it’s best to check the intended recipient receives the instruction by telephoning them. The third step you should take is to establish if you ever ceded an insurance policy to your bank. We suggest you check that such cession have been cancelled to avoid an unwelcome surprise in the future.
And finally, take problems that your bank refuses to deal with to the Ombudsman for Banking Services. If every banking consumer took this stance the banks will soon stop pushing the boundaries. Provided your records are in order the Ombudsman is sure to put the bank firmly in its place.
Editor’s thoughts:
Banks get away with their ‘couldn’t care less’ attitude to consumer complaints because they know the average consumer won’t pursue the matter. It’s time the South African consumer takes the fight to the banks and stands up for his/her rights. Have you considered taking a bank fee fight to the Ombudsman for Banking Services, or do you consider it too much trouble? Add your comments below, or send them to gareth@fanews.co.za
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