The latest report by the Banking Adjudicator shows that a lack of communication from banks when dealing with consumer grievances is a major source of dissatisfaction.
Many consumers are unhappy with the way banks deal with their complaints, and the failure of some banks to communicate with clients about their grievances is adding to the workload of the Banking Adjudicator.
In his annual report for 2001, which was released this week, Advocate Neville Melville, the Banking Adjudicator, says it is of concern that 31 percent of consumers still regard their banks' complaint-handling mechanisms as poor.
An independent survey into customers' perceptions of their banks found that a significant number of consumers are dissatisfied with the failure of banks to communicate with them about their complaints. Over 42 percent of those polled rated their banks as being "fair" or "poor" when it came to keeping them informed.
"We are convinced that our workload would decrease significantly if the banks were to improve in this area," Melville says.
Common criticisms from consumers include: lack of explanation; lack of response; complaints dragging on; banks not accepting responsibility for their error; and bad attitude.
As an example, Melville highlighted a case in which a bank chose to pay a client R3 000 for distress and inconvenience rather than apologise.
The case arose when after having agreed in principle to grant the client a home loan, the bank went back to the client with some previously unmentioned conditions that were unacceptable to the client.
By the time the matter was resolved, the purchase of the property had fallen through.
All the consumer wanted was an apology from the bank. As no apology was forthcoming, the adjudicator recommended that the bank pay him R3 000 for distress and inconvenience.
The survey also found that, on average, two thirds of those polled rated their banks as "good", "very good" or "excellent". Melville described these results as "very gratifying".
Maladministration and fraud by other parties are the two biggest causes of consumer complaints to the adjudicator. Maladministration accounted for almost 35 percent of complaints and fraud for just over 18 percent.
Negligence was the third-largest source of complaints, making up 8.5 percent of the total.
Melville says that crime results in more complaints from South African consumers than is the case in other countries. There is no other country in which so-called ATM crime occurs to the extent that it does here.
Melville praised some of the major banks for their initiatives to combat ATM crime.
Dishonesty and conflicting statements from the parties involved in a dispute are a particular problem for the adjudicator's office.
Melville intends using forensic investigators to examine bank's computer systems and transactions more thoroughly in future.
Melville says while clients whose claims have been successfully resolved readily appreciate the value of the adjudicator's office, the banks tend not to realise that his office has saved them money by keeping a large number of matters out of the courts.
More importantly, in many in-stances the adjudicator's office has reconciled banks with their customers, saving the banks from losing disgruntled clients.
Over the past 12 months, the adjudicator's office helped about 12 000 consumers. Of these complaints and inquiries, about 1 500 were resolved informally and 2 200 formal complaints were submitted.
Of the complaints investigated by the adjudicator, 50 percent were resolved in favour of consumers and 42 percent in favour of banks. The remaining eight percent fell outside the jurisdiction of the adjudicator.
Last year, 72 percent of complaints were closed within six months of being received by the adjudicator's office. "From now on, the office plans to finalise all but the most complex complaints within four months of them being formally accepted (as a complaint)," Melville says.
Compared to previous years, in 2001 the banks resolved a higher percentage of matters that were referred to them without a need for the adjudicator to get involved further.
Before the middle of last year, the banks had, on average, resolved only 50 percent of the matters sent to them. By the end of the year, some banks were resolving as many as 80 percent of the complaints.
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