Bank behaving badly? The ombud can help get your cash back
New report highlights growing danger of online banking and credit card fraud
Of the more than 7,000 cases that the Banking Services Ombudsman of SA's office closed in 2018, more than a third (37%) related to some form of maladministration - a deviation from a bank’s procedures causing customers "a loss, distress or inconvenience".
The ombud includes reckless lending - a bank failing to conduct an affordability assessment when granting credit - in that 37%.
The figures were revealed in Johannesburg on Wednesday by banking ombud Reana Steyn at the release of the office's 2018 annual report.
It was mainly bank customers over the age of 40 who complained about their banks - they made up 70% of cases. "Whether more senior customers are specifically targeted or just more prone to scams, this group is a priority concern and we would like to assist customers in this space," said Steyn.
Many of them were victims of some form of fraud in 2018, mostly related to online banking.
"The number for online banking related complaints closed by the office in 2018 is slightly less than the previous year but it's still the top category of complaints opened and closed for the second year running, making up 22% of all cases opened," said Steyn.
When the bank owes you back
In one of the case studies highlighted in the report, a complainant was a victim of online banking fraud to the tune of R140,000 after he fell for the infamous Microsoft scam. A fraudster transferred his money from his bank to a beneficiary bank. He reported his loss to his bank on November 25 2017 and was then told that none of his money could not be recovered, which is when he complained to the ombud.
"During the course of our investigation it was discovered that the beneficiary bank informed the complainant's bank on numerous occasions after the fraud was reported to it that a SAPS case number and affidavit were required from the complainant, otherwise the fraud hold on the beneficiary account would be uplifted," said the ombud.
"The complainant’s bank did not inform the complainant of this requirement from the beneficiary bank and as such the SAPS case number and affidavit were not provided timeously, which resulted in the beneficiary withdrawing all the funds."
So although the client fell victim to a phishing scam and gave up his confidential banking details, the ombud found that he suffered the R140,000 loss not because of his lapse but because his bank failed to act on the beneficiary bank's request in time.
"Essentially his bank was in a position to mitigate his loss and failed to do so. It was our recommendation that the complainant's bank refund the complainant, and the bank agreed," said the ombud.
The lesson? "Complainants should report fraud to the bank timeously - and if the bank fails to take the necessary measures to mitigate the loss, the bank will be held liable."
In another case, a taxi driver had his complaint upheld by the ombud and got the R10,000 he was entitled to. The bank in question had offered R10,000 cash back to all its customers if they settled any of their motor vehicle accounts held with the bank and immediately signed a new motor vehicle finance agreement. The taxi driver did just that, but when he asked about his R10,000, he was told the offer excluded minibus taxis.
"We considered the terms and conditions of the cash-back offer and discovered that they were ambiguous as they referred to motor vehicles without specifically stating that minibus taxis were excluded," said Steyn,
The bank agreed to pay the customer the cash-back value and amend its terms and conditions to eliminate the ambiguity.
These two cases were among the 18.2% that were fully upheld by the ombud's office. Another 4.6% were partially upheld, meaning customers got some relief from the bank, based on the ombud's ruling.
In other words, 77.2% of cases went the way of the bank, not the complainant, in 2018 - compared with 72% in 2017 and 75% in 2016.
Credit card fraud on the rise
Steyn recently reported a worrying spike in credit card fraud, which began in early January and therefore does not reflect in the 2018 report.
In 2015, credit card fraud made up just 7% of complaints to the banking ombud. By March last year, that figure was up 12%. By end of the year, that figure hadn't budged. Now that figure is close to 20% and Steyn predicted that credit card fraud would soon take over the top spot on the list of banking maladministration.
The fraudsters' modus operandi is to source a victim's credit card details from the dark web before phoning them, pretending to be from their bank's fraud department. They then trick them into reading out the one-time pin codes sent to their phone by their bank. Armed with those codes, the fraudsters can shop with the card.
How to complain
Lodge a formal, written complaint directly with your bank's dispute resolution department. Ask for a complaint reference number from your bank. Allow the bank 20 working days to respond to your complaint. If you are not happy with it, contact the office of the ombudsman via the website.