From banks’ frequent system downtime to out-of-order ATMs to misplacement of cheques for credit card bill payments to ignored requests for cancellation of the cards — the list of complaints for consumer financing is long.

The Banking Ombudsman’s office documents these and many more complaints everyday, and tries to persuade banks to address them. But the redressal is slow, and account holders continue to suffer.

“This has to change if banks want to ride the tide of growing credit demand,” insists a central banker.

The enormity and complexity of complaints against banks have compelled the Banking Ombudsman to ask the central bank to issue more specific guidelines. “But new guidelines are no panacea. The answer to the problem lies in the enforcement of existing guidelines.”

“Complaints also pour in, at bank branches and at senior management levels,” admits the head of a local bank. “Bulk of the complaints is about consumer financing practices and products. Other product-lines and overall banking don’t attract grievances on a large scale.”

Yearly reports of the Banking Ombudsman, however, show, and SBP officials dealing with banking services confirm that the dissatisfaction over banks’ services and products is widespread.

What is ‘encouraging’ though is that “except for putting up misleading advertisements, most other things that attract customers’ complaints can be categorised as errors of omission, at least on part of the top management of banks,” says a former head of a large bank.

The Banking Ombudsman categorises complaints against banks into 18 areas, including misleading advertisements that promise a higher-than actual rate of return or conceal some conditions attached with earning a certain return on deposit, or about availing loans at a certain rate.

“Back in the 1990s and well into mid-2000, misleading ads were not uncommon, but later on, the SBP enforced a strict code of conduct, and things are far better now,” according to a central banker. In 2012, out of 4,000 complaints against banking products and services, only five were regarding misleading ads.

Auto loans, credit cards, housing loans and loans for household durables — which make up banks’ consumer products — remain at the centre of customers’ complaints. In 2012, more than 1,000 grievances were recorded in this area. Complaints about credit cards and ATMs numbered around 600.

“I myself experienced banks’ irregularities on ATMs when I was a director [of one of SBP’s departments],” recalls a senior central banker. “I was overcharged twice, but on both occasions I was duly compensated.”

Not all people are as lucky, however. Countless people tell stories of how they are routinely overcharged and when they seek cancellation of their cards, banks ignore their requests.

“This becomes more painful when one makes the card cancellation request to prevent its misuse after the card is stolen or gets lost,” laments a young engineer working with a cement company who went through such an experience two years ago.

Gross dereliction in duties on the part of bank employees often gives rise to grievances of different nature. In 2012, more than 100 cases of gross negligence came to the notice of the Banking Ombudsman. More recent data is not available.

Officials advise account holders that if they are wronged by their banks, they should approach the Ombudsman’s office. Sometimes it pays off.

In 2012, a lady complained that her bank had not ‘automatically rolled over’ her investment of Rs2 million in a five-year term deposit. She was thus deprived of a certain amount of profit. Upon investigation, her claim was found valid and she finally got ‘her lost profit of Rs82,849,’ an official told Dawn.

In case the Ombudsman’s verdict doesn’t satisfy a bank or its aggrieved account holder, either party can approach the SBP for a final resolution of their dispute.

Records show that the Ombudsman’s office manages to resolve about 90 per cent of complaints against banks every year through a reconciliation process, and only in 10 per cent of the cases did the office have to issue formal orders. And just a tiny percentage of the formal orders were contested by banks or by their aggrieved bank customers and were taken to the SBP.

“Central to the issue of bank-customer relationship is the confidence a customer has in the fair practices of his bank,” opines a foreign bank’s executive. Some banks fail to cultivate this confidence because of lack of internal controls.

Unauthorised selling of insurance policies by unscrupulous employees of a few banks to their clients exemplifies this lack of control. Banking sources say employees of at least two banks have been selling insurance policies to customers on the pretext that it is part of the required documentation to qualify them for participating in certain investment schemes.

“We’re aware of this. Under several sets of SBP guidelines and instructions, such practices make banks liable to penal action. This is going to come to an end,” a senior central banker told Dawn.