Still too many bank gripes, laments Ombudsman.

Thursday, 10 March 2005 - Business Day
Linda Ensor

Although there has been a significant improvement in levels of customers satisfaction, banking Ombudsman Neville Melville has expressed concern at the number of complaints still being filed at his office.

The office received 14 000 inquiries in 2004-05, a 26% increase on 2003-04. After being referred back to banks for them to try to sort out, the number was whittled down at about 3 000.

"The Ombudsman should not be receiving so many complaints," Melville told the Cape Town Press Club yesterday. He also noted the banks' reluctance to apologies for errors, referring to a case of a bank preferring to pay R10 000 rather than tender an apology.

Of all complaints handled, 54% were settled in favour of consumers. Most complaints concerned small amounts and related to automatic teller machine malfunctions and problems with cheques. Larger amounts often related to loss of income on investments.

Mortgage-related complaints - for example over the interest rate charged, or delays in processing mortgage applications - were also a source of many complaints, Melville said.

"One that is of continuing concern to us is that people believe they have life assurance cover over a mortgage loan, only to find out when the breadwinner dies that there was none because the policy had lapsed or whatever and the widow is left to fend for herself."

While the number of complaints was growing as awareness of the services of the Ombudsman spread and the number of bank account-holders rose, there was a growing tendency for banks to handle more complaints internally as they found it "embarrassing" and costly to have them referring to the Ombudsman, Melville said.

Compared with their international counterparts, however, banks had a long way to go in sorting out complaints themselves, he said.

Awareness of the Ombudsman among consumers had increased from 22% to 44%, according to a Markinor survey conducted in October last year.

The Ombudsman managed to recover R14m from banks for dissatisfied customers this year, an increase from the R11m total recouped in 2003-04.

The office has a target of dealing with all matters within six months of receiving them.