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Competition
Commission Enquiry into Bank Charges The response of the Ombudsman for Banking Services (the OBS) to media queries following the Competition Commission’s announcement that it will be holding a public enquiry into bank charges follows. In keeping with the rules of financial ombudsman schemes internationally, upon which the OBS is modeled, the OBS may not consider a complaint or dispute that relates to a practice or policy of a bank (for example, a bank’s general interest rate policy or fees and charges policy), unless it relates to a fee or charge being incorrectly applied by the bank having regard to any scale of charges generally applied by that bank. The role of the OBS is set out below. Fees and charges are regulatory issues. The statutory regulators in South Africa that have a say over the banks and their conduct are the Reserve Bank, the Financial Services Board and, to a lesser extent, the DTI. Notwithstanding this, the OBS has been and continues to be approached by bank customers who wish to complain about bank fees or penalties in particular. Further, a large percentage of those consumers who have participated in a competition currently being run by the OBS, inviting bank consumers to provide tips for the banking industry, have commented on the need for banks fees and charges to be addressed. Out of a desire to be relevant in a South African context and to provide a comprehensive service to bank customers, the OBS is exploring the possibility of expanding its mandate to cover policy issues and charges. We welcome the enquiry of the Competition Commission, on an issue that has long been the subject of public debate. The OBS will make representations to the Competition Commission. Role of OBS The OBS exists to provide individual and small business bank customers with a fair, quick and effective dispute resolution process, free of charge. It provides an informal, easily accessible alternative to other remedies, such as court proceedings. It deals with complaints in which bank customers have suffered some significant monetary loss, distress or inconvenience as a result of maladministration (our emphasis) on the part of a bank. |