The National Financial Ombud Scheme revealed that fraud remains the largest category of complaints handled by the banking division, with customers’ grievances often relating to banks failing to act timeously after becoming aware of fraud.
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A growing number of bank fraud cases involve phone scammers who impersonate bank officials to deceive customers into transferring their funds to a so-called “safe account” as their bank account has been compromised.
“Fraudsters have sophisticated means and networks to gather information which is then used to persuade a customer that they are calling from the bank by seemingly knowing all the customer’s details,” said Nerosha Maseti, the Lead Ombud of the Banking Division at the National Financial Ombud Scheme (NFO).
“A bank will never call you to request your PIN, OTP, or other confidential information. Banks will never instruct customers to transfer funds. If you receive an unsolicited call from someone claiming to be from your bank, contact your bank’s official fraud department immediately to confirm the legitimacy of the request," Maseti said.
The NFO also revealed that fraud remains the largest category of complaints handled by the banking division, with customers’ grievances often relating to banks failing to act timeously after becoming aware of fraud.
Maseti said fraud accounts for 39% of the complaints received and often when reporting fraud to the bank, banking customers do not feel heard or assisted fairly.
Maseti said fraud was often committed because despite regular warnings from banks, regulators and other industry bodies, customers continue to disclose One-Time PINs, passwords and other confidential information to fraudsters.
She advised customers to carefully read SMS notifications or other in-app notifications received from their banks, including the notifications with One-Time PINs, to ensure that the activity on their accounts aligns to what they are doing on the account. If a customer is not transacting or the amounts in the notification are incorrect or not in the correct currency, customers must immediately contact their bank’s fraud department.
Maseti added that bank customers have every right to expect good service and for complaints to be taken.
She said the Code of Banking Practice and the Conduct Standard for Financial Institutions clearly stipulate banks’ responsibilities to treat customers fairly and transparently while offering services that meet specific quality standards.
The Banking Division dealt with 750 service-related complaints last year.
In terms of industry policies, banks are required to provide clear information about their products and services and ensure customers understand the terms and conditions of agreements. They must address complaints fairly and transparently and have an effective system in place for handling complaints, Maseti said.
The Financial Services Conduct Authority’s recent review of South African banks also highlighted significant shortcomings in their complaints management processes.
“One of the key findings revealed that banks have inadequately disclosed the availability of ombudsman redress mechanisms, thereby limiting complainants’ ability to pursue alternative avenues of recourse. This makes it absolutely crucial for the NFO to leverage all available platforms to inform consumers of their right to access our office,” she said.
“Many bank customers feel helpless when disputes arise, as they often lack the financial resources or technical knowledge to successfully challenge their banks. As a result, they may avoid pursuing their complaints, especially when dissatisfied with the feedback from the bank. Often, they are sent from pillar to post in search of assistance.
“All commercial banks in South Africa are participants in the NFO, allowing consumers to lodge complaints against any of these banks,” Maseti said.
Cape Times