Poor Bank Service Costs Bank R1 Million as Elderly Customer Walks Away

In a clear case of how poor service can cost more than just reputation, a 76-year-old South African man closed all his accounts and moved R1 million out of a major bank after his complaints were repeatedly ignored.

The case, recently highlighted by the National Financial Ombud Scheme (NFO), underscores the importance of customer-centric service in the banking sector — especially for senior clients.

A Simple Request Turned into a Frustrating Journey

According to Nerosha Maseti, Lead Ombud for the Banking Division at the NFO, the customer approached a branch to open a no-fee account. He was reassured this would be the case — but fees were still charged.

When he raised the issue, the bank reversed the charges — minus R1 — and advised him to open a seniors’ cheque account, again promising no fees. However, charges continued to appear, and his attempts to resolve the matter at multiple branches were met with poor support and inadequate responses.

“It emerged that the bank staff who assisted the complainant did not have the necessary product knowledge or did not take the customer’s request properly into consideration,” Maseti said.

The Ombud Steps In

Frustrated, the elderly customer eventually approached the Banking Division of the NFO, seeking a refund of the fees and R160 compensation for costs incurred traveling between branches.

While the bank initially cited its terms and conditions to justify the charges, it eventually refunded the fees as a “gesture of goodwill.” However, it declined to pay the R160.

After reviewing the case, the NFO recommended that the customer be compensated for the inconvenience, highlighting that the bank failed to follow Treating Customers Fairly (TCF) principles.

Both the customer and the bank accepted the NFO’s recommendation. But the damage was already done — the customer had lost all trust in the bank.

“By this time the customer was so unhappy that he closed all his accounts with the bank and moved R1 million out of the bank,” said Maseti.

Lessons for Banks

Maseti emphasized that banks must do more than just follow policy — they must listen to their customers, ensure staff are well-informed, and handle complaints with empathy and transparency.

“Banks can generate word-of-mouth referrals and a strong reputation by providing a positive customer experience,” she added. “They must focus on building relationships with their customers, understanding their needs, and providing personalised service.”

What to Do If You’re Unhappy With Your Bank

Consumers who feel their complaints are being ignored can approach the Banking Division of the NFO, which investigates such matters free of charge.

This case is a stark reminder: in today’s competitive financial market, customers — even senior ones — have options, and poor service can come at a high cost.

{Source IOL}

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