Online banking fraud still top of ombud’s workload, with the banks winning
The end of this fraud is ‘nowhere in sight’, with the ombud finding for the bank in the overwhelming majority of cases
Victims of online banking fraud continue to draw the short straw, with the ombud for banking finding in favour of banks in the overwhelming majority of cases.
Internet banking fraud cases dominated the workload of the Ombudsman for Banking Services (OBS) last year, according to the OBS’s latest annual report. This is the fourth consecutive year that internet banking complaints have been the most common complaint by consumers to the office of the OBS.
“It seems the end of this trend is nowhere in sight,” ombud Reana Steyn says in the 2019 annual report. Of the 1,292 cases of internet banking fraud dealt with by the office, the ombud found in favour of the banks in 73% of cases.
Steyn says banks continually work to improve their security, “but, more importantly, they are also relooking the handling of these matters in line with the ‘treating customers fairly’ outcomes and the shift towards customer-centric behaviour”.
She says the OBS will increase its awareness campaigns this year to make more consumers understand the need to protect their personal information and online banking credentials, covering all angles, such as social media, phishing e-mails and purported phone calls from the bank (“vishing”).
The next biggest category of complaints to the ombud related to credit cards. The OBS dealt with 904 such cases and found in favour of the banks in 76% of cases. Steyn says card fraud and charge-back disputes were the two most prevalent types of credit card complaints.
Complaints about ATMs comprised 13% of complaints dealt with by the OBS last year. In 84% of the 821 cases, the ombud found in favour of the banks.
Steyn says most of ATM complaints related to customers being defrauded at ATMs themselves. Such investigations require that the ombud’s adjudicators are satisfied that the customer compromised their card and PIN through no fault of the bank.
Complaints about current accounts made up the fourth-biggest category of complaints, and in 65% of the 689 such cases the ombud found in favour of the banks. The OBS dealt with 666 complaints relating to personal loans, and in 69% of cases found in favour of the banks.
The OBS opened fewer cases (6,472) last year compared to 2018 (7,115), and closed fewer cases (6,333 compared to 7,307 in 2018).
Steyn attributes this to the increased complexity of some complaints, which meant they took much longer to resolve, and the increase in the numbers of complaints received over the preceding two years.
The OBS also received fewer calls to its call centre (26,257 in 2019 compared to 26,970 in 2018), and 1,600 fewer referrals of complaints by the ombud to the banks than the previous year.
Steyn says this could indicate that more banking clients understand that they have to first report any dispute or complaint to their bank to try to resolve the issue, before they approach the ombud for assistance.
The office, however, saw a big increase in the number of walk-in complainants from 113 in 2018 to 326 in 2019. Most complaints (63,7%) were resolved within two months, according to the annual report.