Absa leads the pack on customer complaints

12 May 2004 - The Star

The Ombudsman for Banking Services has for the first time spelled out the number of complaints received by each bank, with Absa leading the pack, but he cautioned that it was not necessarily an indicator of the performance of the bank or its ability to handle complaints.

John Simpson, the manager of the complaints adjudication department of the Ombudsman, said that although it was the first time that the Ombudsman had named the banks the number of complaints was not indicative of the individual banks complaint handling capacity or performance.

A spokesperson for Absa said the bank was the largest retail bank with well over 6.3 million clients, and 704 complaints were not a large number in that context. The bank, nevertheless, intended to introduce a range of "radical" customer service initiatives soon.

Neville Melville, the Ombudsman, said that the rate and magnitude of change in the banking industry since 2000 had been overwhelming but there had been a discernable change in the attitudes of the banks.

He said the demise of Saambou and BoE might have been the reason, as they "certainly must have made the banks realise just how vulnerable they are to negative public perception or sentiment".

A Markinor survey indicated there was a dramatic decrease of almost a million in the number of bank customers who had cause for complaint over six months last year, indicating that the attitudes and approaches of banks towards customers had improved, Melville said.

Simpson said the Ombudsman expected a large increase in the number of complaints when banks started implementing the financial services charter and started providing accounts to the 13 million adults who did not have bank accounts. The Ombudsman was building capacity for this, he said.

The overall number of files closed last year was up 11 percent at 2 242. However, there was a decrease in the number of complaints that needed to be referred for investigation and adjudication, which indicated the banks had generally improved their ability to resolve complaints when they were referred to banks by the Ombudsman.

Among the causes for such complaints, maladministration remained at the top of the list, comprising 23 percent of all the files opened last year. Misinterpretation comprised 16 percent, fraud 13 percent, unfair treatment 11 percent, negligence 10 percent, transaction error 10 percent, card swapping 7 percent and fees and charges 6 percent. 

It took an average of 83 days to finalise a file. Of the cases closed, 93 percent were finalised within six months of a file being opened. This was an improvement on the 77 percent of 2003.

Melville commented that in spite of complaints, better efficiencies actually landed the Ombudsman in a situation where it seriously considered laying off operating staff.

The Ombudsman typically tries to provide banks and their customers with quick and efficient dispute resolution service, in an impartial and confidential manner.