Johannesburg - Has your bank treated you unfairly? Mismanaged your accounts? Overcharged you? Violated your human rights by forcing you to listen to Beyonce for hours while holding for a "service representative"?
Taking on your bank may seem like a battle.
In recent years, the Ombudsman for Banking Services found in favour of banks in between 45% to 50% of the complaints it received.
Banks usually have the law on their side because they stick to the fine print in their agreements with clients. While their harsh penalties and excessive charges may strike you as unfair, unfortunately you would have agreed to their terms when you took out that loan or opened an account.
"Customers make the mistake of thinking that when they are in breach of their legal agreements with the bank, we [Ombudsman for Banking Services] are in a position to make certain demands to the bank," said Uzile Gugushe, marketing officer of the Ombudsman for Banking Services. To avoid losing a battle with your bank, check all legal agreements before signing.
The new National Credit Act has given consumers much greater recourse against unfair treatment, exploitation and excessive charges. By law, banks have to inform you in writing about the total cost of any debt you take on.
For a home loan, for example, this includes your principal debt, all the interest you will pay, the initiation fee, service fee, administration costs and credit insurance.
This gives you much more power than in the past. However, the new requirements make it more difficult for you to complain after you've signed a contract. If you signed the final credit agreement, which should also include all details about costs and rates, it is assumed that you understood and agreed to it.
Stay on top of your accounts
Stop throwing your unopened bank statements away or using them as coffee coasters. Make sure you are aware of all movements in your accounts, which charges are levied and also take heed of outstanding cheques and credit card transactions.
Most complaints the ombud receives about banks involve maladministration.
But many banking clients do not check their bank statements, said Gugushe.
Take immediate action
Contact your bank as soon as you have a complaint. Banks have a time limit on complaints.
All the banks have set up dispute centres, and on their websites you'll find contact details.
These may include that you will be provided with a resolution or the estimated time required to resolve the complaint within three working days of lodging the matter.
If your bank has not resolved the complaint after twenty business days, or you are unhappy with the outcome, you have to lodge a complaint with the ombudsman.
Go to the ombudsman's website to get an application for assistance.
Gugushe said that the ombudsman's office will respond to your application within one week.
The office will first have to decide whether it has the jurisdiction to investigate.
"Customers tend to think that we are in a position to insist that banks approve their loans, which we can't," said Gugushe. The ombudsman will then give the bank at least three weeks to try to resolve the problem with you.
"You should be prepared to talk to the bank if it contacts you during this time. Do not assume that because you have lodged a complaint with the ombudsman that your bank must deal only with the ombudsman and not with you. If you can resolve the complaint with your bank at this stage it will save you time and may repair your relationship with your bank.
"Some of your expectations of what the bank should do to resolve the complaint may be unrealistic. If the bank makes you an offer that is less than you want, bear in mind that we will not necessarily recommend that it makes a better offer."
It can take a maximum of four months to complete all investigations.
Don't get legal help before you've approached the ombudsman.
Although they know the ombudsman's service is free, some customers will first go to a lawyer, who will charge them for the service, said Gugushe.
Be organised
Every time you contact the bank, make sure you make notes of whom you spoke to.
Keep all relevant documents and records to corroborate your case.
"In the absence of 'evidence' from both parties, we would simply not be able to impartially assess the merits of the complaint," said Gugushe.
Home loan troubleshooting
Complaints about home loans are some of the most common issues the ombudsman has to deal with. But in almost two thirds of cases, rulings go against customers.
Problems usually come in when clients default on instalments and the banks take action.
Avoid this escalation by immediately contacting the bank when it looks like you won't be able to afford your payments. Try to work out easier payback terms, or be proactive and try to sell your house. The longer you take to react, the more money will be lost on outstanding payments, interest plus banking, administration and legal costs (particularly if the bank sells it on auction).
Another common problem is that banks continue to levy insurance premiums (you are forced to take out cover for the property when you get a home loan) after you've paid off your house. This happens when you've already settled the loan amount, but haven't cancelled the registration of your bond yet.
Also, make sure that your bank is keeping the property insurance separate from your home loan account. In the past, banks added the insurance policy to the home loan and charged interest on it.
The ombudsman has also awarded compensation for some clients who have suffered when their banks contributed to delays in property transferrals. This included that the banks' lawyers didn't act fast enough - or if the bank lost or misplaced title deeds.
Avoid another common problem by taking precaution when buying a property with another person. Make sure you don't sign a document that only one person's signature is required to get to the money. This often causes difficulties.
Dump your bank
If you are getting bad service from your bank, take your money elsewhere before you encounter any serious losses because of mismanagement and errors. The costs associated with transferring your home loan (including bond registration fees) should be offset by negotiating a lower interest rate, though.
Reckless lending?
If you can make a case that the bank extended credit to you which you couldn't afford, you may take it up with the ombudsman.
Credit legislation requires that banks have to make certain that your debt repayments and minimum living costs are less than your net monthly income before they give you a loan. If you were totally honest in your application and can prove that the banks didn't do the necessary homework, you may have a case.
Remember also that banks may not increase the limits on your credit card or overdraft without your agreement. Banks can only hike your maximum credit once a year - only by a limited amount and only with your approval.
Bad advice?
Have you lost money because of incompetent investment advice from a bank representative? The ombudsman has awarded compensation in some cases.
- Fin24.com