Offending banks are set to be 'named and shamed'

Business Day, Company News - May 14 2003
Rob Rose

Banks that infringe consumer right will be publicly "named and shamed" by SA's banking adjudicator, Neville Melville, from mow on.

Melville released his office's annual report yesterday, disclosing that 1 878 complains were brought to the adjudicator last year, 30% of which related to the maladministration within banks.

Of the total complaints, Melville's office found in favour of consumers in 56% of cases and in favour of banks in 44%. Of these complaints, there were six rulings made which for the first time were binding on the banks. "All but one of the rulings were in favour of the complainants."

However, raising the stakes for the banks involved in disputes with consumers , the Office of the Banking Adjudicator Commission had empowered Melville to publish the names of all banks involved in an ruling.

However, only cases not settled earlier and in which the law is certain to proceed to a ruling.

Melville said this was done because banks had often "unnecessarily held out on settling" the matter with the consumer in the hope that the ruling would go in their favour.

"In some cases we have dealt with, banks should have settled earlier. This is another arrow in the quiver to incentivise banks not to drag out the process," he said.

He said that another factor could be due to a "couldn't care less" attitude of some bank employees.

But Melville said the adjudicator's office had had an effect on the way banks interacted with consumers. "There is definitely a sense of change. banks are now focusing largely on customer relationships, for which we may be partly responsible," he said.

Topping the list of concerns raised by consumers were problems with automatic teller machines, with mortgage complaints and consumer finance also a major source of complaints.

Although Saambou Bank went under last year, none of the consumers affected by this could bring complaints to Melville, as the actions of a curator do not fall under the adjudicator's jurisdiction.

Banking Council CE Bob Tucker said this was clearly a problem. Tucker said that this needed to be changed so that consumers could enjoy greater protection should there be any bank failures in the future.

Melville said it took only a short period of time to deal with most complaints brought to his office.

"The average time taken to reach finalisation was reduced, with 77% of cases having been closed within six months of receipt," the annual report said.