British Gripe About Banks, But ATMs Fade as Target
LONDON - Automated teller machines may no longer be Public Enemy No. 1 of bank customers in Britain, but the increasing automation of bank services still causes plenty of grievances, a study has found.
Customer complaints to the banking industry's official ombudsman, Laurence Shurman, rocketed 62% last year, to 6,327, he said in his annual report.
Rising bank fees and interest rates replaced ATMs as the most common cause of protest, contributing about a sixth of complaints received by the ombudsman. The industry finances the 25-person arbitration office.
Effects of Automation
Computerization is also a factor behind rising protests, Mr. Shurman said.
"It is a great boon, but the more you get away from the traditional bank manager, the more difficult it is to put things right," he said.
"Sometimes the computers generate charges that the individual bank manager would not have sanctioned if he had seen them in the first place. That is one of the spinoffs of mechanization."
He cited bank charges that computers were programmed to automatically adjust, particularly on a quarter-on-quarter basis, and charges for customers overdrawn on their checking accounts
ATMs were ranked third as a source of disputes, though complaints declined.
The chief ATM grievance centered on "phantom withdrawals" from teller machines made without the cardholders' knowledge, the ombudsman said.
Banks are expected shortly to publish a new code of industry practice, including the imposition of a $75 maximum on the customer's liability when a cash card is used without consent - protection similar to that already offered on credit cards.
Mr. Shurman rejected many customers' claims that rising ATM crime was being spurred by criminals' use of various methods to discover personal identification numbers in order to make fraudulent withdrawals.
"There are an awful lot of fairy tales around," he said.
Most ATM complaints were rejected, usually because it turned out the customer had just forgotten making the transaction or that the card had been stolen or borrowed by a relative or friend.
Tight credit policy by banks provided the second-largest source of complaints.
Britain's economic downturn probably contributed to the increasing number of grievances, the ombudsman's report suggests.
"It is no accident that people are scrutinizing their bank accounts more carefully as the recession bites," he said.
Out of all the disputes reported, 2,500 were rejected. In some 200 cases, the ombudsman recommended cash payments to customers, with the top award totaling nearly $15,000.
Mr. Shurman declined to give details of specific cases.