Latest news with #CodeofBankingPractice
The Citizen
31-05-2025
- Business
- The Citizen
Your money, your rules – these are your banking rights
Your banking rights are protected by the Code of Banking Practice compiled by the Financial Sector Conduct Authority. When you pay your money into your bank account, your money remains yours and therefore you should have rights attached to your money and your bank account. Having a bank account is not just about keeping your money safe but about having financial security, making payments easily and accessing services that improve your life. In short: your bank owes you. Banks are required to treat all customers fairly and cannot discriminate based on income, gender, race or background. However, despite these regulations, many consumers continue to face challenges in accessing financial services due to high costs and complex requirements. Therefore, Cheslyn Jacobs, chief commercial officer at TymeBank, says you should understand your rights as a consumer when it comes to banking. 'Understanding your rights helps you to make informed choices and ensures that your bank treats you fairly. It allows you to confidently navigate banking services, question unfair charges and take advantage of the benefits and protections available to you as a customer. 'When you know what to expect, you can make financial decisions that best serve your needs and long-term goals.' The Code of Banking Practice guides how banks should treat you. The Financial Sector Conduct Authority (FSCA) also ensures compliance with the code. Jacobs says these rights include: Your right to a bank account You have the right to open a bank account, provided you meet some basic requirements, such as proof of your identity, proof of residence and sometimes proof of income. You may also need to provide a minimum opening deposit. ALSO READ: FSCA finds banks do not handle consumer complaints properly Your right to clear information about bank charges It is important to know the costs associated with your account, Jacobs says. Banks are required to clearly explain all fees, charges and interest rates before you open an account. Always ask for a list of all costs upfront, check your bank's website and regularly review your bank statements. Your right to switch banks If you are unhappy with your bank's service, fees, or policies, you have the right to move your money to another bank. Jacobs says it is easier than ever to switch banks. 'Compare options and choose a bank that offers affordable, transparent and secure banking when you switch.'. ALSO READ: FSCA to investigate banks charging different amounts for the same product Your right to have your privacy and security protected Your bank must protect your personal and financial information and cannot share your details without your consent unless required by law. However, Jacobs points out, safeguarding your financial security is also your responsibility. 'To protect yourself, always use strong, unique passwords for online banking and enable two-factor authentication where possible. Be cautious of phishing scams and never click on suspicious links or share your banking details over the phone, email, or text unless you are 100% certain of the recipient's identity. 'Regularly monitor your bank statements for any unauthorised transactions and report them immediately. When using ATMs, be aware of your surroundings and shield your PIN entry. If you lose your card or suspect fraud, notify your bank as soon as possible to block unauthorised access. By staying vigilant and following these steps, you can help keep your financial information secure.' ALSO READ: FSCA fines African Bank R700 000 for misleading advertising [VIDEO] Be on the lookout for fraud and stay aware According to the South African Banking Risk Information Centre (Sabric), an organisation that works with banks, law enforcement, and regulators to combat fraud, nearly R3.3 billion was lost to fraud in 2023. Digital banking fraud increased by 45%, and banking app fraud by 89%. 'Criminals are using advanced technologies, and therefore it is important to stay informed,' Jacobs says. Look out for a bank that offers security features such as: Biometric verification that protects you against identity theft. DebiCheck, which allows you to approve transactions before money is deducted. Multi-factor authentication by using a One-time PIN (OTP) to verify transactions. Security updates must be done regularly to protect your account against fraud. Tips and updates via various communication channels, including SMS, social media and email on how to protect your money. ALSO READ: Consumer Protection Act and your rights How the Consumer Protection Act adds to your banking rights The Consumer Protection Act (CPA) protects you from unfair treatment, misleading information and hidden fees from your bank. It ensures you receive fair and transparent financial services. Jacobs says if your bank fails to meet these standards, you have the right to take action to protect yourself and hold them accountable. He says when you have a problem with your bank, you must start by trying to resolve your complaint directly with the bank, as the Code requires all financial institutions to have internal dispute resolution processes. 'Clearly outline the issue, provide any supporting documents and request a formal response. If the bank does not resolve your complaint satisfactorily and you believe you have been treated unfairly, you have the right to escalate the matter.' If you believe that your bank did not comply with the CPA, you can approach the National Consumer Commission (NCC) for complaints about unfair business practices, such as misleading advertising or hidden fees. ALSO READ: Financial service provider giving you problems? The NFO can help Other regulators that can help to protect your banking rights The National Financial Ombud Scheme South Africa (NFO) is an independent organisation dedicated to resolving consumer complaints against financial service providers, including banks, credit providers and insurers. Their services are impartial, confidential and free of charge. You can visit the NFO's website to lodge a complaint. Concerns related to financial advice or investment products can be investigated and mediated by the Ombud for Financial Services Providers (FAIS Ombud). Jacobs says these regulatory bodies have the authority to enforce corrective action, ensure that consumers are treated fairly and that banks comply with consumer protection laws. 'By taking these steps, you can assert your rights, seek fair treatment and contribute to greater accountability in the financial sector. 'Many South Africans do not realise they have banking and consumer rights. Understanding these rights helps you to make informed choices and protect yourself from unfair treatment or fraudulent activity.'
IOL News
26-05-2025
- Business
- IOL News
Editor's Note: Cabinet must reform the COFI Bill to protect the right to bank
According to the current regulatory frameworks, banks are obliged to notify customers and provide them with the opportunity to make representations before terminating their accounts. The Conduct of Financial Institutions (COFI) Bill, soon to be submitted to Cabinet, is a critical opportunity to address arbitrary bank account closures in South Africa. These closures threaten economic stability, undermine fairness, and grant banks unchecked power to act as de facto regulators of public and private life. However, the Bill in its current form fails to adequately protect the right to bank. I urge parliamentarians to scrutinise this legislation and demand reforms that enshrine procedural fairness, as recommended by the Zondo Commission and grounded in the audi alteram partem principle. Cabinet must address these shortcomings by ensuring the COFI Bill incorporates robust protections, including the right to a fair hearing, as recommended by the Zondo Commission and supported by the audi alteram partem principle. The audi alteram partem rule, a cornerstone of natural justice, mandates that individuals be given an opportunity to respond to allegations before decisions are made against them. In the context of bank account closures, this principle is critical. Banks currently rely on the Code of Banking Practice, which only requires "sufficient notice" before termination. This vague standard fails to ensure procedural fairness, particularly for public figures, large-scale employers, or influential stakeholders whose account closures can have far-reaching consequences The Problem: Arbitrary Account Closures South Africa's banking regulatory framework, including the Code of Banking Practice, allows banks to terminate accounts with minimal oversight. Banks often cite vague reasons like "reputational risk," a term so broad it invites abuse. This practice has far-reaching consequences, particularly for public figures, employers, or influential stakeholders whose closures can disrupt businesses and livelihoods. For example, Independent Media recently faced account closure threats based on flimsy reputational risk claims, while Nedbank, implicated in corruption by the Zondo Commission, faced no similar scrutiny. Such inconsistencies highlight the need for reform. As I've previously written, public outcry over these closures reflects growing frustration with banks' disproportionate power. I have written extensively on the subject: Public outcry over bank account closures due to unfounded 'reputational risk' Reputational risk is a red herring and violates my rights - Dr Survé Dr Survé welcomes FSCA's taking banks to task over bank account closures on basis of reputational risk Legal Context: A Flawed The case of Bredenkamp v Standard Bank (2010) illustrates the dangers of the current framework. The Supreme Court of Appeal upheld Standard Bank's right to unilaterally terminate John Bredenkamp's accounts based on reputational risk, setting a precedent that allows banks to act with minimal accountability. While Bredenkamp's alleged illicit activities raised legitimate concerns, the ruling failed to establish a clear process for customers to contest closures. This precedent empowers banks to target parliamentarians, ministers, lawyers, businesspeople, and academics without due process, effectively allowing financial institutions to influence governance and economic activity. Such power is antithetical to a democratic society and risks undermining public trust in both the banking sector and the state. The Zondo Commission said there was a need for stronger protections against arbitrary closures, warning that banks should not wield unchecked power. Internationally, jurisdictions like the UK have taken steps to curb such practices, prohibiting banks from closing accounts based on customers' political views. The US Senate Banking Committee is also moving to eliminate reputational risk as a basis for banking decisions. South Africa must follow suit. The COFI Bill, designed to shift South Africa's financial regulatory framework toward a principles-based, outcome-driven model, is an opportunity to address these issues. However, in its current form, the Bill falls short. The Financial Sector Conduct Authority (FSCA) and National Treasury, through Commissioner Unathi Kamlana and Ismail Momoniat respectively, have acknowledged the need for legislative reform to curb arbitrary closures. The COFI Bill: An Opportunity for Reform The COFI Bill does not mandate a fair hearing for customers, nor does it impose stricter guidelines on banks beyond the existing Conduct Standard for Banks (2020). This standard vaguely requires a "fair process" for account terminations but explicitly avoids prescribing a hearing in cases involving suspected money laundering or terror financing, citing potential conflicts with other laws. While these exceptions are valid, they should not justify blanket exemptions that allow banks to bypass fairness in other cases. Customers, especially those whose closures impact public interest - such as employers or influential figures - must have the right to challenge terminations in court. Without this safeguard, banks can arbitrarily disrupt businesses, livelihoods, and even political processes by targeting accounts without transparent justification. Recommendations for Cabinet To protect the right to bank, Cabinet must demand the following amendments to the COFI Bill: Enshrine the audi alteram partem principle: Require banks to provide customers with a fair hearing before closing accounts, ensuring procedural fairness. Limit vague justifications: Prohibit banks from using "reputational risk" as a catch-all excuse for terminations, mandating specific, evidence-based reasons. Ensure judicial recourse: Grant customers, especially those whose closures impact public interest, the right to challenge terminations in court. Align with Zondo Commission recommendations: Incorporate the Commission's call for stronger protections to prevent banks from wielding unchecked power. It is important that Cabinet demand amendments that align the Bill with the Zondo Commission's recommendations and the principles of fairness. By failing to act, Cabinet risks allowing banks to continue wielding unchecked power, undermining South Africa's economic and democratic fabric. BUSINESS REPORT
1News
24-04-2025
- Business
- 1News
NZ banks to reimburse some scam victims up to $500,000
Banks will now be required to reimburse scam victims up to $500,000 if they fail to adequately warn and protect a consumer from a scam. The Banking Association has announced five new protections introduced to the Code of Banking Practice, which will be progressively rolled out over the next seven months. Where a bank fails to meet the five new commitments, institutions will compensate all or part of the loss for eligible customers. Banks will also retain the discretion to pay compensation beyond what is set out in the code. Banks would also continue to compensate losses for eligible customers when services are accessed without the customer's authority. Commerce and Consumer Affairs Minister Scott Simpson said the compensation scheme and stronger safeguards were an "important win for bank customers". "New commitments from banks mean that if a bank fails to adequately warn and protect a consumer from a scam, they will reimburse the victim up to $500,000," he said. NetSafe chief online safety officer Sean Lyons said stopping scammers requires a multi-faceted approach. (Source: Breakfast) He said banks would also take a more active role in preventing scams by participating in information-sharing agreements across industry and government and educating people. "While people still need to remain vigilant and take responsibility for their own online safety, these changes will enable consumers to check a payment is legitimate before transferring money," Simpson said. Similar expectations were made clear to telecommunications companies and digital platforms, which scam messages can be carried over. The scam protection commitments include: Confirmation of Payee service for customers to check that the name of the person they are paying matches the account number. This has already begun. Pre-transaction warnings to consumers based on the payment purpose. Identification of and response to high-risk transactions or unusual account transaction activity, and the ability to block or delay transactions in some cases. Providing a 24/7 reporting channel for customers who think they've been scammed, and responding to protect accounts. Sharing scammer account information with other banks to help prevent criminal activity, and freezing funds where appropriate. NetSafe chief online safety officer Sean Lyons told Breakfast that the announcement was "movement in the right direction". "What we're talking about is banks saying 'we will look at what we see as high-risk transactions, we will try and educate and inform individuals, we will allow them to contact us 24/7'. All of these things are definitely moves in the right direction to minimise the losses that New Zealanders are experiencing." He said dealing with scams was a "multifaceted thing" with lots of moving parts, which could be confusing for many people. "Knowing that people have a place to go and talk to, finding that advice is also a really key part to stopping people before they get caught in that scam." Lyons said it was hard to get an accurate picture of the amount of losses, as people feel a huge sense of shame and embarrassment about falling victim to scams. "We have to get past that idea that there's a 'type' of person that gets scammed. It's not an age, it's not a gender, it's not what you're doing. There's a scam out there that will hit you at the right time. "If it hits you at the right time, it's likely to have you fall for it. The scammers keep moving, they keep changing, they keep modifying what they do in order to make us not feel steady on our feet around these things,' he said. He said the banks sharing information with one another about bad actors was a great step forward. 'We need to be constantly changing what it is that we do to make the scam landscape as difficult and disruptive as we can for scammers and as easy to access support and help for New Zealand consumers."
RNZ News
23-04-2025
- Business
- RNZ News
Consumer advocate says bank protections 'half-baked'
Will bank customers be better protected from scammers by changes to the Code of Banking Practice? Photo: 123RF The Code of Banking Practice is being updated to better protect customers from scammers - including pre-transaction warnings, a new 24/7 reporting channel and refunds of up to half a million dollars if a case meets certain criteria. The confirmation of payee service - where banks identify if a bank account matches a name that goes with it - was rolled out in November. The Banking Association says the new measures will better protect customers, but a long-time advocate for scam victims, Janine Starks, isn't convinced.
Scoop
23-04-2025
- Business
- Scoop
Banking Ombudsman Scheme Backs Banks' Stronger Consumer Protections From Scams
Press Release – Banking Ombudsman Scheme These initiatives will all help in the fight against the scourge of scams. However, for scam prevention measures to be truly successful, more cross-sector collaboration is needed. The Banking Ombudsman Scheme has welcomed today's announcement by banks that they will crack down on scams. Banking Ombudsman Nicola Sladden said the scheme had been calling for stronger consumer protections from scams for some time. 'We see first-hand the emotional and financial cost of scams. Beyond the monetary impact, victims endure the distress of being deceived, leading to a loss of confidence to operate online. 'Consumers are doing more and more online, making it increasingly vital they have a safe digital environment in which to make payments and transfer money. 'We're pleased the confirmation of payee system is now in place. It's an obvious way to fight back against scammers.' Ms Sladden also welcomed other initiatives such as greater sharing of intelligence, improved fraud detection systems and warnings for high-risk transactions. 'These initiatives will all help in the fight against the scourge of scams. However, for scam prevention measures to be truly successful, more cross-sector collaboration is needed. 'New Zealand will not be able to defeat scammers unless all relevant government and non-government organisations work in concert. Scammers will continue to exploit vulnerabilities in the eco-system, so any counter-measures must be equally broad in scope.' She said the Government, relevant agencies such as the police and the National Cyber Security Centre, banks, telecommunications companies and digital platforms must work together to make scam prevention stronger at every level. 'We also welcome the updated Code of Banking Practice. It is a step forward. The updated Code now provides a basis for banks to compensate customers for scam losses for both authorised and unauthorised payment scams.' Ms Sladden said the scheme believed the introduction of comprehensive, mandatory codes of practice for banks, telecommunication companies and digital platforms governing their responsibilities in preventing scams and the scope of their liability in the event of scam losses was long overdue. 'Enforceable standards will help lift the bar on preventing scams. Such standards will provide clarity for consumers and industry, which will help deliver effective resolution. 'We look forward to increased collaboration with banks, consumer groups, regulators and government agencies to prevent scams.' The scheme received 949 scam cases in the 2023-24 financial year. The average loss for escalated scam cases (disputes) was $80,000 – up from $57,000 the previous year. About the scheme The Banking Ombudsman Scheme is a free and independent dispute resolution service. We look into complaints by customers about their banks. Sometimes we make formal decisions, but often we facilitate outcomes agreeable to the customer and the bank before that. We also help in other ways, such as offering information and guidance on banking matters. We put the customer at the heart of what we do.
