Recovering money owed to me by the bank: My 10-Week Fight with the South African Banking System

by Selinda Phenyo
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By Aphelele Mtwecu

On April 25th, 2024, I made two immediate payments to a service provider through my bank. Little did I know that this would start a gruesome ten-week journey to reclaim my money. Through this experience, I gained a profound understanding of the South African banking system, the limitations of consumer protection mechanisms, and the importance of institutions like the National Financial Ombudsman (NFO) and the Independent Communications Authority of South Africa (ICASA).

Although South African consumers are theoretically protected by legislation like the Consumer Protection Act (CPA), when errors occur, consumers are often left in the dark, navigating complex systems with minimal assistance.

Initially, I wasn’t overly concerned. Network errors happen, especially during peak times like payday. However, as three days passed without any update on the transactions, my mild concern escalated alarmingly. I began my dogged search for answers, contacting the bank and the service provider.

As the days stretched into weeks with no resolution in sight, the gravity of my situation dawned on me. The incident wasn’t a mere hiccup but a complex web involving my bank, the payment gateway, and the service provider. With each entity, the plot thickened, but my funds were nowhere in sight.

After facing challenges with the various parties’ internal escalations and banging my head against the wall with nothing to lose, I wondered what my legislative rights were as a consumer. This curiosity led me to research the Consumer Protection Act, which, in turn, prompted me to discover the National Financial Ombudsman (NFO).

This independent body provides ‘free, confidential, and efficient resolution of consumer complaints against financial service providers.’ The new scheme consolidates the former Banking Ombud (OBS), the Credit Ombud (CO), the Long-Term Insurance Ombud (OLTI), and the Short-Term Insurance Ombud (OSTI).

In addition to the ombud, the merits of my case also involved the Independent Communications Authority of South Africa (ICASA) as a potential organization to address the specifics of this case.

Each institution had its own complex and time-consuming dispute resolution process. Despite the NFO’s mandate to handle complaints against financial institutions like banks, they deemed my case “beyond their jurisdiction,” leaving me to navigate the complex financial landscape alone. Considering that the bank in question is registered with the South African Reserve Bank, which appears to fall under the jurisdiction of the NFO, this decision was particularly puzzling.

Despite the challenges of the escalation process, the ICASA team worked diligently to review and consolidate the details of my case. As a result of their efforts, my funds were successfully returned to me after ten weeks, coinciding with the mampara (the week before payday) week.

However, this ordeal left me with lingering questions and curiosity about the magnitude and frequency of these cases, particularly those that reach the jurisdiction stage within the National Financial Ombudsman (NFO) and the escalation procedures available to consumers.

In the former Ombudsman for Banking Services (OBS) Annual Report for 2021-2022, there were, on average, 1,424 active cases each month. It is shocking, considering the report also indicated that these cases took an average of 67 days to resolve. A huge operational burden lies in the administration of the NFO, which is concerning. Besides burdening consumers, the lengthy resolution times indicate a high volume of cases the NFO deals with, making the current dispute resolution process less efficient and effective.

Granted, I achieved results, but I recognise that my privilege significantly contributed to my access to information and resources.

Although my case is just one among many handled by the Ombudsman, the financial impact of being without a significant amount of funds for three months is substantial. Credit scores may drop, debts accumulate, and even more severe consequences may arise. Dealing with constant stonewalling is an experience I wouldn’t wish on anyone. Each time I interacted with a new consultant, I had to recount the details—an exhausting and stressful process. But who compensates the consumer for these damages?

Finally, consumers must know their rights and hold financial institutions accountable to create a more equitable and transparent financial ecosystem in South Africa. As highlighted by OBS Annual Report  2021-2022, given the frequent complaints from consumers and the vulnerability of certain groups, it’s clear that we need to be more alert and take proactive steps to address these issues. Our commitment to understanding our rights under the National Consumer Protection Act and pursuing them is essential to protecting our interests and improving the financial system.

Collective efforts needed to cut youth joblessness

Aphelele Mtwecu is a content writer for ACTIVATE! Change Drivers writers’ hub, an activist, and creative force passionate about youth development, transformation, and social impact. As a 2016 Activator and member of the ACTIVATE! Change Drivers writer’s hub, Aphelele, uses her writing to inspire and advocate for positive change. She is deeply committed to advocating for mental health and working to remove the stigma around mental health. She is also committed to creating more safe spaces for young people to engage.


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