By Robert Laing for Business Day
The number of complaints from banking customers grew by an “unprecedented” 35% to 7 056 formal cases opened by the industry’s ombudsman in 2017, from the prior year.
Cases involving internet banking fraud overtook ATM complaints, banking ombudsman Reana Steyn said in the office’s annual report released on Wednesday.
Steyn said 22% of all banking disputes related to online banking, and “phishing” — a fraud scheme whereby consumers are duped into disclosing their login and password details via e-mails purporting to come from the bank — accounted for 77% of these.
“The category that previously topped the list, ATM complaints, were second highest at 18%, down 10% from the previous year, which is good news,” Steyn said.
The Ombudsman for Banking Services (OBS) is a voluntary dispute resolution service funded by the industry to offer consumers a way to escalate complaints without employing lawyers.
“It is unfortunate that consumers who are unsuccessful with their complaints levy the criticism of bias against the ombuds office. Our office works very hard to uphold high standards in adjudication and in applying the law to the fact of the case,” she said.
“The office found in favour of complainants in 27% of the cases, indicating that most matters capable of early resolution were resolved at the bank. While the number may appear low, it is in line with international experience at other ombuds offices.” People unhappy with their bank are encouraged to take their dispute to the OBS if their complaint has not been handled within 20 working days.
By Thandi Skade for Destiny Connect
FNB has announced the launch eWallet eXtra, a mobile offering that enables unbanked South Africans to open a bank account remotely via their cellphones.
The service, which is scheduled for launch in June, will enable consumers to open a bank account without ever having to walk into a branch and without having to submit any paperwork.
The entire process of opening an account is done digitally and the only details you would have to input on your phone is your name, surname and ID number.
“eWallet eXtra will enable users to send or receive deposits from individuals and other banks, store funds for an unlimited period, pay accounts and also buy prepaid products like airtime, data and electricity. Users can also on send to other recipients and withdraw at any FNB ATM or at tills across participating Spar stores, which also allow for over-the-counter purchases. The daily spend limit is R3 000,” says Gugu Zikhali, FNB Head of Transaction Products: Mass Market.
Account holders will also be able to check their bank account balance and transaction history and similar to any bank account, you’ll need to generate a PIN in order to access the account.
The idea was born out of the need to bring the gap between banked and unbanked consumers, while also servicing the needs of irregular income earners like season workers who don’t always necessarily need all the services offered with a traditional bank account.
“This is why we have integrated some eWallet functionality into the eWallet eXtra mobile bank account. After an in-depth assessment of eWallet user patterns, we realised that in excess of one million users have been effectively using it as a bank account despite the fact that the solution was designed as a remittance service,” says Pieter Woodhatch, FNB Easy CEO.
There are no monthly banking fees attached to eWallet eXtra and it doesn’t accept debit orders.
“We believe that eWallet eXtra is the ideal solution to address this important gap and based on the analysis of our customer base and research on financial inclusion, we estimate the size of this market to be in excess of 11 million,” he adds.
You need to be over the age of 16 to use the offering.
Image credit: Memeburn
Shortseller Viceroy Research has insisted the Reserve Bank should not rely on Capitec’s financial statements and should place it into curatorship.
On Monday, the shortseller released its long-awaited statement in response to the Reserve Bank’s statement of support for Capitec in which the Bank assured the market that Capitec was “solvent, well capitalised and had adequate liquidity”.
The Reserve Bank made this statement after Viceroy claimed last week that Capitec was understating losses and on the brink of insolvency.
“We understand that the [Reserve Bank] has not yet performed an adequate regulatory inspection of Capitec and expect they will do so in due course.
“For the moment Viceroy will respond to [the Reserve Bank], limiting themselves to information contained in the most recent Capitec annual report,” Viceroy said.
But sources in the banking sector said the Reserve Bank’s bank supervision department did not rely on annual reports or results. In terms of the Banks Act, all registered banks and representative offices are required to file financial and risk information regularly with the department.
“Monthly BA [Banks Act] reporting takes place using various BA returns for finance and risk, on either 15, 20 or 30 days,” said Jaco van Wyk, head of group finance at FirstRand. “These returns are not public.”
The Reserve Bank does publish the BA900 form, an itemised balance sheet.
The Reserve Bank was “fully aware of the credit-scoring models and the risk targets that we set when we extend credit”, Capitec said.
In its statement, Viceroy said Capitec’s mechanism of underrepresenting losses was to “pretend” that uncollectable loans of at least R10bn were collectable and accruing interest.
Most of these were in longer-term categories stretching up to 84 months, it said.
Using Capitec’s gross cumulative loss curve for 61-to 84-month loans granted in different quarters, Viceroy concluded that losses on these loans were roughly 1.5% a year, a figure which Viceroy described as “astonishingly low”.
But Capitec said only 7.3% of its credit clients qualified for loans longer than 60 months.
“Viceroy infers that it is impossible for the average American credit-card holder to have similar credit risk as the top 7% of Capitec’s clients.
“We have extensive history and sophisticated models to support our results,” the bank said on Monday.
The actual arrears on 84-month loans was 3.1%, not the 1.3% cited by Viceroy.
Capitec also addressed the main issues raised in the initial Viceroy report in more detail on Monday.
Viceroy had not taken into account its conservative write-off policy relative to its peers, nor had it distinguished between consolidated and rescheduled loans, it said.
By Moyagabo Maake and Hanna Ziady for Business Day
A new banking scam whereby fraudsters remotely take control of your PC over the Internet to gain access to consumer’s online banking profile is currently doing the rounds.
This is according to First National Bank (FNB), which alerted consumers about the latest festive season scam.
In a statement, FNB says fraudsters are sending unsuspecting consumers fake emails notifying them that fraud has occurred on their respective bank accounts’ or credit cards.
Soon after the email is sent the customer receives a call from a fraudster claiming to be from their bank and offers to help block any fraudulent transactions by first requesting the customer to install “protection” software on their computer, which allows the fraudster to gain full control of the computer remotely.
Kovelin Naidoo, cyber security officer at FNB, says fraudsters are employing carefully constructed scamming tactics that have the ability to trick even the most vigilant customer if they are not aware of the modus operandi.
“If someone calls you and requests your personal banking details or to install remote access software on your computer, please end the phone call and contact your banks’ fraud contact centre. FNB will never ask you to share your OTP to reverse pending transactions or to block your banking profile,” cautions Naidoo.
He adds: “As access to banking services through digital channels continues to grow, so does the prevalence of banking scams, therefore we urge consumers to always be vigilant and familiarise themselves with the different types of digital banking fraud, as well as the security measures provided by their respective banks.”
How fraudsters use the software to defraud consumers:
- The fraudster calls the customer and offers to help them block any fraudulent transaction by asking him/her to download and install “protective” PC software.
- The customer downloads the software, and with the help of the fraudster, installs it.
- Once the software is installed, the fraudster asks the customer to log into his/her personal online banking profile.
- After logging in, the customer’s computer goes blank. Shortly afterwards, he/she starts receiving OTP (one-time pin) SMS’ to confirm transactions he/she did not perform.
- The fraudster then reassures the customer that these are fraudulent transactions and requests that he/she forwards the OTPs so that they can be blocked or reversed immediately.
- The fraudster then uses the OTPs forwarded to him/her to process the pending transactions and defrauds the customer.
Source: IT Web
The vast majority of First National Bank’s (FNB’s) customer interactions are via digital platforms, with only 1.2% still happening face-to-face in branches.
This is according to Christoph Nieuwoudt, FNB consumer segment CEO, who says in 2016, FNB customers had over 10 billion interactions with the bank, of which only 120 million were face-to-face.
The bank says roughly 8.5 billion (85%) of interactions were purely through digital channels and the rest via point-of-sale (card swipes or online purchases) and ATM transactions.
“The number of FNB customer interactions has tripled since 2010, growing at more than 20% per annum every year, based on the growth in digital channels. Meanwhile, at branches, customers are making significant use of in-branch digital zones,” adds Nieuwoudt.
“One thing we can all agree on is that digital progress is inevitable.”
He says the implications of the use of technology by society are immensely profound, with terms such as “The Second Machine Age” or the “Fourth Industrial Revolution” being used to give this evolution a name.
“The reasons for the growth and migration of volumes to digital are obvious as almost every customer knows they can do basically any payment transaction, account or card service function and get most products…via the FNB app, online or cellphone banking,” he says.
However, Nieuwoudt says this does not mean branches will go out of business. He notes branches and branch personnel are no less critical than before, but their role has changed from performing transactions to re-focusing on sales and advising customers on how to bank.
“In spite of the powerful digital technology, today the bulk of banking consumers still want to talk to someone when opening a new account and even for most product categories.
“Additionally, consumers often need help with the new technology, even just to get going and start using it.
“In most cases, branches can be much smaller, but with more room for digital zones and self-service devices such as ATMs and ADTs (deposit-taking machines). This journey is not unique to banking – virtually every sales or service business is or will be going through some elements of digital transformation.”
Nieuwoudt also says that today only a very small percentage of credit decisions are made by people – rather statistical models are used to make fully automated decisions instantly at low cost and with accuracy not achievable by a person.
“This means your risk profile and behaviour determines your loan size and pricing. Importantly, technology has helped reduce fraud loss rates for card and digital transactions,” concludes Nieuwoudt.
Source: IT Web
Axiz has announced that the company has become the latest victim of the on-going “bank account number change” scam.
Axiz has released the following message to its clients: