The Activity of Banking Supervision in the Handling of Public Enquiries and Complaints in 2010

05.04.2011
 
The Activity of Banking Supervision
in the Handling of Public Enquiries and Complaints in 2010
 
To view this press release as a WORD file - Click here
 
For the report - Click here
 
  Twenty-five percent of the complaints against the banks and credit card companies for which a position was taken were found to be justified in 2010, compared with 26.6 percent in the previous year.
  The banks refunded a total of about NIS 6.2 million in 2010 as a result of the intervention by the Banking Supervision (both as a result of individual complaints and systemic problems).
  Of the five banking groups, the Leumi and Hapoalim groups received the highest ratings according to four criteria that are based on information accumulated by Banking Supervision in the processing of public enquiries and complaints.
  Among the largest five banks, the activity of Bank Leumi was rated the highest based on the various criteria.
In 2010, the Banking Supervision dealt with 7,165[1] written enquiries and complaints from customers of the banks and credit card companies (not including enquires by telephone which are estimated at about 20,000 a year), of which 2,757 were complaints and the rest were enquiries and requests for information. A position was taken on 2,028 complaints (either justified or unjustified) while on the rest no position was taken, primarily due to the inability to decide between two conflicting versions, to the fact that legal action was being taken or because the bank had in any case decided to accept the customer’s request.
Twenty-five percent of the complaints against the banks and credit card companies on which a position was taken were found to be justified in 2010, compared with 26.6 percent in 2009. The decline in the proportion of justified complaints was characteristic of all the five major banks. As can be seen in Figure 1 below, there has been a decline in the proportion of justified complaints during the first half of the decade followed by a leveling off in the second.
 

 
The banks refunded a total of about NIS 6.2 million in 2010 as a result of the intervention by the Banking Supervision (as a result of both individual complaints and systemic problems).
The total amount of refunds and compensation paid to customers as a result of individual enquiries and complaints totaled about NIS 2.4 million in 2010. Of that, about NIS 750,000 was paid by the banks even though the complaint or enquiry was not classified as justified. This is an indication of the willingness of the banks to consider each case individually and in certain instances to compensate customers even when their complaint is not justified.
Complaints and enquiries are also used to identify and correct systemic problems in the banking system. In 2010, about 30 such problems were dealt with. As a result, the banks and the credit card companies were required to take various actions, including creation or amendment of work procedures, improvement of processes and service and refunds to groups of costumers. The Banking Supervision monitors the implementation of these processes by the banks.
The information obtained from public enquiries and complaints, among other sources, leads in certain cases to refunds to groups of customers who experienced losses as a result of the problem identified. Total refunds to groups of customers as a result of information from complaints stood at NIS 3.8 million in 2010. For further details on refunds, see the full report.
In 2010, the treatment of customers by the five banking groups[2] and the largest five banks, as reflected in the enquiries and complaints dealt with by the Banking Supervision, were evaluated according to four criteria based on data accumulated by the Banking Supervision and on the basis of a new methodology.[3] The criteria for evaluation are described in the full report.
 

 
For more details, see the full report.
The Banking Supervision Department continues to serve the public in all aspects of its relations with the banks and credit card companies. For information on how to submit bank-related complaints, contact the Unit for Public Enquiries:
  Internet site
  Tel: 02-6552680
  Fax: 02-6669077
  Address: PO 7780 Jerusalem 91007
 
[1] This figure includes complaints regarding the collapse of the Hephzibah Company. The rest of the statistics presented in this report do not include these complaints which will be described in a separate document.
[2] The five banking groups: Leumi Group (Bank Leumi Le-Israel Ltd., Leumi Mortgage Bank Ltd., Arab-Israeli Bank and the Leumicard company), Hapoalim Group (Bank Hapoalim Ltd. and Isracard Ltd.), Mizrahi-Tephahot Group (Mizrahi-Tephahot Bank Ltd. and Bank Yahav Ltd), Discount Group (Israel Discount Bank Ltd, Discount Mortgage Bank Ltd, Israel Credit Cards Ltd. and Diners Club Ltd) and First International Group (First International Bank Ltd., Bank Otsar Ha’hayal Ltd., Poalei Agudat Israel Bank Ltd. and Bank Massad Ltd.).
[3] The rating of the banking corporations is based only on the information obtained by the Banking Supervision Department in its investigations of complaints and enquiries. The rating does not indicate a comprehensive grade or a rating of banks’ overall activities, and thus should not be considered a basis or grounds for any recommendation or proposal.