Avoid becoming a victim, by learning from these banking ombud complaints

Heeding the lessons from complaints about banks is one way to ensure that your rights as a banking consumer are respected and that you don’t fall victim to the latest banking scams and lose all your hard-earned money.

Looking at the complaint summaries in the latest annual report of the Ombudsman for Banking Services, it is clear that you have to be wide awake while dealing with any bank. We take a look at some of the summaries to see what we can learn from other consumers’ experiences and complaints.

ALSO READ: Internet banking complaints on the rise – ombud gives almost R20 million back to consumers

Prescribed debt

Prescription is a legal principle that states that your liability to pay an outstanding debt is extinguished after a prescribed time period, provided you did not acknowledge your liability to pay.

A consumer, therefore, complained to the ombudsman that his bank is still expecting him to pay a loan that had prescribed on 30 August 2020.

He lodged a dispute at the credit bureau, but the bank dismissed his claim and told the ombudsman that it reviewed the matter and could confirm that prescription did not apply. The bank also said that the consumer was not disputing the debt but was raising prescription, which can be regarded as an Acknowledgement of Debt.

This would mean that prescription was interrupted, but the ombudsman disagreed and pointed out to the bank that the National Credit Act (NCA) specifically prevents a credit provider from collecting funds on a prescribed debt.

The provision states that prescription will apply if you have reasonably been aware of the defence of prescription when contacted about the debt. The ombudsman considered the debt as prescribed and the bank accepted this.

The ombudsman says banks must ensure that they comply with their obligations in terms of the NCA regarding prescription, because banks are not allowed to collect on a debt that has prescribed in law.

ALSO READ: How much Capitec makes in fees from customers – and how other banks compare

Incorrect payment

A pensioner paid R38 500 in error into a third-party account at the same bank. He immediately went to his branch and spoke to his private banker, who found that the funds had cleared before she could do a reversal.

She took the initiative to contact the beneficiary account holder, told him that the funds were paid into his account in error, and requested his consent to reverse the funds, which were paid into his savings account.

He had already paid it into his credit card account and the banker asked him to move the funds back to his savings account. He agreed and moved the funds back to his savings account but before the bank could process the debit, he moved the money back to his credit card.

It was found that there was a seven-hour time lapse from when he moved the money back to his savings account to when he changed his mind and moved it back to his credit card.

While the ombudsman acknowledged the consultant’s initial pro-activeness, she could not ignore that if the consultant reversed the amount immediately, or at the very least actioned the reversal by the close of business, the pensioner would have not suffered a loss of R38 500.00.

The ombudsman believes that the private banker had a duty of care to act as a matter of urgency and that the bank failed the consumer. No follow-up was done with the consumer and when he called, he was told to complete a form although the consultant already knew that the reversal could not happen, leaving him under the impression that there was still a possibility that he could get his money back.

As the ombudsman felt that the bank’s actions caused the customer a fair amount of distress and inconvenience, she recommended that the bank reimburse the pensioner in full.

The ombudsman says when placed in a position to mitigate a customer’s loss, the bank has an obligation to ensure that it does all that is necessary to assist. Any failure on the part of the bank will result in the bank being held liable for the loss that it could prevent.

ALSO READ: Consumers warned about getting trapped in debt spiral

Authority to debit

A consumer who rented a car got a big surprise when the rental company deducted R38 700.00 from his Mastercard account.

When he asked his bank to reverse the charge, the bank said it could not do so, because the consumer had contractual obligations toward the car rental company, who said the amount was charged for towing the vehicle which the consumer had allegedly abandoned.

However, the Mastercard rules dealing with charges for loss, theft, or damages, state that irrespective of what the contract states, the merchant must ensure that an estimated cost of the damage is communicated to the customer and his specific authority to debit his account with that specific amount must be obtained.

The ombudsman said if she had to accept that the car rental company is allowed to debit the account without communicating the estimated cost of damages or repairs, and without obtaining his specific consent, car rental companies would be allowed carte blanche to debit a customer’s account with whatever sum they deem fit, which surely could not be allowed.

If a customer declines to allow the debit, the company can always pursue the matter in court as well.

The ombudsman maintained that when the chargeback was raised with the bank, the bank was supposed to request the rental company to provide proof of compliance with the rules. After much debate, the bank accepted the ombudsman’s position and reversed the debit.

Banks must ensure that they are aware of, and comply with, the MasterCard Rules when a dispute is received, the ombudsman says.

ALSO READ: Homeowners must brace for interest rate hikes

Want to complain about your bank?

Consumers must first try to resolve their complaints with their banks before approaching the ombudsman’s office. The call centre number is 0860 800 900 or visit the website at www.obssa.co.za.