In 2020, Internet banking fraud disputes declined from being the largest category of complaints for the first time in two years, says the Ombudsman for Banking Services (OBS).
This is despite the past year being one when digital banking became amplified due to the COVID-19 pandemic.
The OBS is the independent office that aims to resolve customer complaints about banking services and products.
On Wednesday, the office released its annual report for 2020, noting the positive trend in regards to Internet banking fraud complaints.
According to the report, the current account complaints category is seeing the highest number of complaints.
The OBS states that in 2018 and 2019, Internet banking complaints was the largest category, accounting for 22% and 18% of complaints, respectively.
In 2020, it was encouraging to see the number drop down to 13%, says banking ombudsman Reana Steyn.
Steyn points out the decline can be attributed to the efforts of the banking industry, as well as the OBS, which she says, continuously provides education and awareness about fraud and scams in the Internet banking space.
“The OBS closed 981 Internet banking fraud cases in 2020, as opposed to 1 292 in 2019. Seventy-three percent of these complaints were resolved in favour of the banks, and 197 (27%) were in favour of the bank customers.”
The ombudsman office says it managed to recover R16 million in 2020, which was paid back to consumers. This, it notes, is approximately R5 million less than in 2019.
“This can be attributed to the decrease in Internet banking matters, which normally accounted for larger claimed amounts than other dispute categories,” notes an OBS official.
Last year, the office opened a total of 7 717 formal complaint cases, up 19% compared to the 6 472 cases in 2019. It closed 7 230 cases, an increase of 18% compared to the previous year.
The top five categories of complaints include current accounts, Internet banking, personal loans, credit cards and ATMs.
In terms of how the banks fared, the OBS annual report notes only Absa as the bank to record a reduction in complaints – down 36% year-on-year.
However, Steyn cautions that the number of files opened against a bank should not necessarily be regarded as an indication of that bank’s overall or complaints handling performance.
She highlights that banks vary in size, client profile and product mix. In addition, fraudsters seem to periodically target certain groups of customers. All of these factors impact on the number of complaints made against any given bank.
According to the office, Absa saw the number of complaints opened against it with the OBS decrease from 1 483 in 2019 to 943 cases in 2020 − a 36% decrease from the previous year.
First National Bank, says the OBS, had 2 197 complaints opened against it, a 22% increase from 2019. Standard Bank had 1 572 complaints opened against it, an increase of 28%.
In addition, Nedbank had 1 217 cases opened, accounting for a 10% increase, and Capitec Bank had 1 259 cases opened against it, a 39% increase.
“As we move forward in this challenging environment, we encourage consumers to have an open relationship with their bank and know that they can come to the OBS if they cannot be assisted by their bank. Further, we urge consumers to be aware that the current environment is heavily conducive to fraud.”
Share