Fraud and finalising estates among the most common complaints about banks in SA

The most consumer complaints about banks in 2022 were about fraud that specifically targeted current accounts and digital banking, with Nedbank and Capitec leading the number of complaints.

According to the annual report of the Ombudsman for Banking Services for 2022, two other categories of complaints with relatively low numbers, finalising deceased estates and collection of prescribed debt, are also on the ombud’s radar.

The ombudsman managed to recover more than R30 million for consumers last year, about R10 million more than in 2021.

Complaints about current accounts increased by 3% to 22% of total cases, with 65% of these related to fraud. Digital banking cases also increased by 3% to 17%.

“The biggest subcategories of these complaints are mobile banking fraud and vishing,” Reana Steyn, Ombudsman for Banking Services, says.

Vishing, or voice phishing, happens when a fraudster calls a customer or leaves voice messages purporting to be from a reputable company in an attempt to glean personal information, such as banking details and credit card numbers.

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Other complaints about banks

Another 13% of complaints were about personal loans, while credit cards only made up 7% of complaints.

Steyn says it appears that the banks are settling more credit card-related matters themselves, as her office opened 7% fewer of these cases in 2022.

ATM-related complaints that featured among the top categories before the pandemic decreased again from 8% in 2021 to 5%, which Steyn says is an indication that fewer consumers use this channel and fraudsters moved to other targets.

How banks handled estates and trusts was a hot topic in the ombudsman’s office in 2022.

“We received 257 complaints regarding delays in the finalisation of estates, compared to 120 the year before. This was an increase of 114% compared to 2021.”

Steyn says complaints about banks collecting on prescribed debts increased substantially. In 2021, this category made up 1.4% of complaints, while in 2022 it made up 4.5% of all complaints.

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Complaints about specific banks

Although the report records statistics of complaints to individual banks, Steyn stresses that the number of files opened per bank is not indication of how good it is or how well it resolves complaints.

“Banks vary considerably in size, while their client profile and product mix are also different. These factors all affect the number of complaints. Comparing the number of clients, the growth of the client base for some and the number of successful banking transactions every day, the low total number of complaints to my office could indicate that things mostly work the way they should in the South African banking space.”

Capitec had the most complaints (1 826), followed by Nedbank (1 508) and both had 18% more complaints than the year before, although 85% of the complaints about Capitec were decided in the bank’s favour and for Nedbank 72%. Capitec also resolved its complaints the fastest, taking only an average of 59 days, while Standard Bank took 73 days.

Complaints about Standard Bank decreased by 31% to 1 385 and about FNB by 21% to 1 147. Absa had the lowest number of cases among the big banks and remained level with 1 068 complaints. Steyn says an indication of how well they handle complaints is their conversion rate of premature cases to formal complaints.

There was a 13% increase in referrals. The report shows that 72% of African Bank’s referrals were converted to formal complaints, followed by Nedbank (64%) and Tyme and Bidvest (both 53%), while FNB converted only 34%.

Referrals are premature complaints from customers who contact the ombudsman about a dispute before it was considered by the bank’s complaints department. In these cases, the ombudsman helps consumers to log the complaint, refer it to the relevant bank where it is satisfactorily resolved or converted into a formal complaint.

You can only refer your complaint to the ombudsman when your bank is unable to resolve it.

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Decrease in formal cases

There was a 5% decrease in formal cases opened (7 969) compared to the previous year (7 869) while cases closed followed the same trend from 8 150 in 2021 to 7 574, a drop of 7%.

“This could be attributed to the growing industry trend to keep complaint numbers down by resolving disputes internally at an early stage. There is also a drive to improve customer experience and avoid negative public sentiment. However, our overall active case numbers remained high, with an average of 1 424 cases open at any given time.”

Of the cases closed in 2022, 23% were resolved in favour of the customer, while 16.1% were fully or partially upheld in the complainant’s favour and in 6.4% of cases no award was made but information or an explanation was provided. One category of complaints resolved mostly in favour of the customer was estates and trusts, where 55% of the 135 cases were resolved in favour of the consumer.

The ombudsman’s office recovered R30 350 173 for customers, an increase of about R10 million, largely due to increased complaints about deceased estate delays and internet banking.