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Nhlanhla Ncaca

THE Ombud for Banking Services (OBS) recovered R7.2 million on behalf of consumers last year – down from the previous year’s figure of R10.3 million.

Advocate Clive Pillay, the ombud, said the reduction was partly due to the financial advisory and intermediary services ombud investigating some of the cases that were previously heard by his office.

These included investment-related cases which involved claims for hundreds of thousands of rands.

Pillay said his office continued to record a “remarkable success rate in resolving disputes involving various banks”. The team finalised 98% of complaints within six months from the date official complaints were lodged.

Pillay explained that despite his office receiving funding mainly from major banks, the OBS remained independent and none of the banks interfered with its decision-making process. The OBS found that the main causes of complaints were maladministration, unfair treatment and fraud.

About 5 500 files were opened against banks and a decision made on about 4 800 cases.

Standard Bank led with 26% of the complaints lodged against it. Absa followed with 25% and 20% of the complaints were against Nedbank and FNB respectively. African Bank recorded 6%.

Most of the complaints (48%) were lodged in Gauteng, 16% in the Western Cape and 12% in KwaZulu-Natal. Other provinces boasted smaller percentages, the least being in Northern Province with 1% of complaints.

The OBS suffered major setbacks last year, including a number of computers being stolen and an incident where the power cables and generator burnt out, leaving employees without a reliable electricity supply for while.

“We lost a significant amount of data and this affected our work considerably, creating a serious backlog in our processing of cases.

“We have subsequently identified the various risk areas and have instituted measures to counteract their effects should it happen again,” said Pillay.

OBS chairperson Advocate John Myburgh said that in its first decade of existence the OBS demonstrated its independence and showed it provided a valuable service to banks and consumers.

The OBS strategy of encouraging banks to resolve complaints timeously resulted in more cases being settled before they needed to be referred to the office.

The OBS added two new complaint categories to its services – reckless lending and phantom withdrawals.

Pillay said the aggregate of the recent interest rate hikes, the spill-over effect of the subprime crisis and legal disputes regarding the interpretation and application of the National Credit Act were expected to lead to an increase in the number of matters requiring investigation.

He cautioned customers to spend money prudently and to reduce their reliance on credit cards.

Pillay advised banks to ensure that they adhered to the procedures as stipulated in the credit act before embarking on debt enforcement steps.

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