A recent case brought before the Banking Services Ombud shows that the terms and conditions in banking contracts have to be crystal clear.
In the case, the complaint looked at fees regarding a home loan account, where the bank charged fees to the complainant for making cash deposits at an ATM.
The complainant looked at the bank’s pricing guide, which stated that fees would only be charged on an account if the payment was made at a branch and never explicitly mentioned an ATM.
The Ombud said that a customer enters into a credit agreement with a bank when they obtain a home loan.
When signing the agreement, it is understood that the customer understands the terms and conditions, including the fees applicable to the account.
Thus, the relationship between the bank and the customer is contractual in nature.
However, the Pricing Guide made no mention of deposits at ATMs.
“We charge a cash deposit fee for any cash deposit into your home loan account at a branch,” it said.
The bank agreed that the deposits were made at an ATM, but still said the fees were applicable.
However, the Ombud said that the pricing guide is far too vague as it only states that a cash deposit fee will be charged at a branch.
Therefore, the bank agreed to reverse all cash deposit fees charged to the account, and the matter was referred to its home loans department to amend the pricing guide.
The Ombud said that contractual matters, such as a home loan agreement, must have clear terms and conditions to prevent misunderstandings.
Although this case was escalated to a dispute, statistics from Ombud showed that mortgage finance disputes reduced in 2022.
According to the OBS Annual Report 2022, mortgage finance disputes dropped from 12% of all disputes in 2021 to 7% in 2022.
Overall, digital banking (17%) and current account (22%) issues were the main issues brought forward to the Ombud: