Banks told to keep contract drafts simple

KEEP it simple. This was the message to banks from Ombudsman for Banking Services (OBS) Clive Pillay, who released the OBS’s 2013 annual report this week.

He said in terms of the Consumer Protection Act, contracts must be drafted in simple, understandable and unambiguous language, yet banks seemed to be falling short of the stipulation.

“We receive complaints from consumers who are not sure what they have signed and, consequently, find themselves in disputes with their banks,” Pillay said.

The OBS report revealed a vast scope of complaints handled by the office of which 4950 cases were dealt with. ATM-related complaints dominated the caseload, with more than 1800 complaints, which accounted for 23% of all complaints.

Pillay said the increase, ironically, could be attributed to the stepping up by banks of security measures to prevent electronic banking fraud.

Criminals were returning to the “easier pickings” of automatic tellers, resorting at times to removing the toll-free numbers from the machines to delay victims’ alerts to the banks.

The OBS investigated 200 more internet banking complaints than in 2012, which was to be expected given the surge in electronic banking and the rapidly growing number of bank customers.

The number of cellphone phishing cases rose by 27%.

In his chairman’s report, Advocate John Myburgh stressed the importance of banks’ security measures remaining one step ahead of the fraudsters.

“Bank information technology specialists need to work with mobile application developers and wireless network service providers to address the challenges associated with security of financial transactions and transmission of financial information electronically and continually update systems to counter new threats,” Myburgh said.

Of the total number of cases for the year, more than 1900 were found in favour of the consumer, which represented a recovery of about R16-million from the banks.

The majority of ATM cases were deemed to be the result of consumers compromising their personal details, resulting in a greater number of findings for the banks. – Business Reporter

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