| Lobby
your bank, says ombudsman Consumers
should put pressure on their banks if they are unhappy about services
or charges, Neville Melville, the Ombudsman for Banking Services, said
this week when addressing the Cape Town Press Club. Consumer lobby groups in the United States have been successful in bringing about change in a way that banks do business in that country, he said. When pressure is brought to bear, changes do take place, he said. The banks recently launched the low-cost Mzanzi account after the government put pressure on the banking industry to cater for low-income earners, for whom bank accounts were not cost effective. The largest number of complaints to the ombudsman concerns mortgage finance, Melville said this week. Given the property boom in South Africa, it is no surprise that this category of complaints has displaced ATM complaints as the top issue among customers, he says. In January this year, mortgage finance accounted for 24 percent of all complaints received over the past year, and 18 percent of complaints concern ATM banking. Melville cautioned clients to be careful not to borrow more than they can afford when taking out a home loan. He predicted that in a year or two, his office would receive complaints from consumers who have borrowed more than they should have to buy a second property. He expects banks will repossess these properties because the buyers will have been unable to lease their properties due to a glut in the letting market. Another issue of concern is life assurance for mortgage holders, Melville said, as consumers often mistakenly believed this was in place, only to discover it was not after the family breadwinner died. On the subject of internet banking, Melville said complaints about internet banking had dwindled to just about nothing. Since the case of an Absa client who lost money in an internet banking transaction a few years ago, banks beefed up their security systems and procedures considerably. These days, for instance, it is no longer possible to open a bank account online. Some of the procedures imposed by banks have made internet banking less user-friendly for clients, but have resulted in greater security. Responding to a question on whether banks should be made to pay for their errors, since they are so quick to charge clients who have made errors, Melville said his office encouraged banks to be more creative in the way they made good to clients. But sometimes banks prefer to pay a penalty rather than tender an apology to a client. A few years ago, a bank (which Melville did not name) paid a client R10 000 for distress and inconvenience rather than apologise to the client. The office of the Ombudsman for Banking Services was set up to help clinets resolve complaints quickly and cost effectively. It does not cost you anything to take a complaint to the ombudsman. After reviewing a case, the ombudsman can make one of two decisions. He can recommend how a dispute should be resolved, however his recommendation is not binding on banks. Or, he can make a determination, which can be made an order of the court, if necessary. The banks that voluntarily subscribe to the ombudsman's scheme, agree to abide by his determinations. The ombudsman can order a bank to compensate consumers for actual losses incurred, plus interest. he can also make financial awards for distress and inconvenience. The ombudsman's office receives about 14 000 inquiries from the public in a year, of which about 3 000 are classified as disputes. On average about 54 percent are resolved in favour of the consumer, Melville says. In 2003, intervention in disputes by the ombudsman put R12 million back into the pockets of consumers and last year R14 million was repaid by banks to consumers. Melville said the number of complaints was an area of concern, considering the number of complaints handled by the ombudsman in the United Kingdom, however, the banks in South Africa were moving in the right direction. |