SA Banks are awesome, according to the OBS
If you are of a certain age, then the term OBS will no doubt conjure up images of camping, caravanning and those late nights around the campfire. In this case, sadly, the acronym does not refer to a sentimental ‘last round’ of Old Brown Sherry, but to the Ombudsman for Banking Services, a voluntary ombudsman scheme that helps ordinary South Africans with complaints pertaining to their bank accounts and banking transactions.
Merger not on the cards, for now
A couple of days ago we tuned in to the official remote launch of the OBS Annual Report 2021 to learn more about consumers’ unhappiness with their banking services providers. The big news in the opening remarks to the event was that National Treasury is yet to make a decision about whether the OBS should merge with other voluntary financial ombudsman schemes. “National Treasury has not made a decision on whether or not to accept the recommendations in the World Bank diagnostic report, [but we have] nevertheless continued to engage with other voluntary ombudsman schemes with a view to achieve a voluntary merger,” said OBS chairman, Advocate JF Myburgh SC, during his introductory remarks.
The Ombudsman for Banking Services, Reana Steyn, was upbeat about the scheme’s 2021 performance. “We opened and closed more cases than ever; we fielded more calls; we have doubled the number of referrals over the last two years; and we recovered ZAR19.4 million rand for consumers last year,” she said. The implicated banks were held 100% liable for complainants’ claims in 15.9% of 2021 complaints and partially liable in 4.5% of complaints, with some wrongdoing on the part of banks in 1639 matters. These achievements coincided with an excellent financial result, with the OBS closing off the year with a net surplus of ZARR6.9 million, excluding the membership contributions received from members for 2022.
Steyn also drew attention to the ombudsman’s ‘vulnerable consumer’ initiative which aims to identify complaints made by aged and / or financially-stressed consumers and expedite such matters. This is a great initiative that FAnews hopes other ombudsman schemes will emulate: we usher the vulnerable to the front of queue when voting, so why not give some extra assistance with financial matters, especially given the complexity of certain banking transactions and the financial consequences to the affected accountholders. Around 70% percent of 2021’s vulnerable consumers where classified as such due to age, with another 22% classified as vulnerable due to a life event such as retrenchment or the death of a spouse or partner.
Small increase in number of formal complaints
Edrich Buytendorp, Data, Information and Operations Manager at OBS, was on hand to give the media a quick overview of the key 2021 statistics. It emerged that the OBS call centre saw a 7% increase in calls received, from 39239 in 2020 to 41880, confirming that the public is more aware of the free, fair, professional and expedient alternative dispute resolution service offered by the OBS. “The office referred 10338 cases to its member banks in 2021, an increase of 23% from 2020,” he said. “If these matter are not resolved between bank and consumer within an initial 20 working days, then we proceed to open a formal complaint”. During 2021, the OBS opened 8257 formal complaints, which total is up 7% on the prior year. The 8039 case closures in 2021 were 9% up on the prior year too.
South Africa’s ombudsman schemes are quite concerned about how their statistics are interpreted. For example, the Ombudsman for Short-term Insurance (OSTI) complaints statistics are nowadays published with the disclaimer: “these statistics should not be used to compare one insurer against another”. In a similar vein, Buytendorp reminded the media that “the number of files opened per bank was not necessarily indicative of a bank’s complaint handling performance [nor] their performance in general”.
The country’s banks vary considerably in size, client profile and product mix and any of these factors can impact on the number of complaints made against a bank. That said, most of the banks saw a sharp increase in formal cases opened in 2021, with Standard Bank (+32%) and Capitec (+31%) leading the pack insofar case volumes. In contrast, the number of formal cases opened for FNB in 2021 decreased by 34%.
Fraud and phishing blight internet banking
Our readers will be more interested on the shenanigans that give rise to a complaint against a bank. It is telling that many of the complaints made against banks are not directly related to the banking products and services. So, while complaints about internet banking topped the list with 19% of 2021 complaints, the major sub-categories under this heading included mobile banking fraud and phishing! Complaints about current accounts were second, with 16% of the total complaints further split into sub-categories like fraud, ‘fees and charges’ and failure by banks to notify customers of account closures. ATM-related complaints came in third, but the category continues to decline year-on-year as people move away from using ATMs and branches to focus on internet banking.
“The role of the banking ombudsman is to resolve banking complaints in a fair, independent and speedy manner,” commented Buytendorp. “Our office found in favour of complainants in 27% of the [closed] cases, indicating once again that most matters being capable of early resolution were resolved by the banks, leaving our office to deal with more complex matters”. He added that the 73% of cases closed in favour of the banks was indicative of the fairness in which the banks and their internal dispute resolution departments treated complainants and their complaints. Hence this writer’s “banks are awesome” headline jibe.
Progress through consistent monitoring
“The OBS will continue to monitor the increases across all complaint categories and engage with the relevant banks to ensure that they are aware of the specific challenges that they need to address in order to improve outcomes for consumers; we are confident that despite the challenging environment, progress is being made by banks to improve the service offering that they provide to consumers,” concluded Steyn. Consumers who have been wronged by their banks or who have suffered losses, or serious distress and inconvenience due to a bank’s maladministration should not hesitate to contact the OBS for the free dispute resolution service it offers.
Writer’s thoughts:
The ongoing migration of bank customers into an entirely digital banking environment is changing the type of problems they experience. One of the trends flagged in the latest Ombudsman for Banking Services (OBS) report is that complaints about fraud in the online banking environment are on the rise, and that older accountholders are at particular risk to email / online fraud and phishing attacks. Are you finding that your older clients are having more difficulties with their banking products and services than before, and have you had to steer any of them to the OBS to assist with bank-related complaints? Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts editor@fanews.co.za.
