Banks record huge increase in customer complaints  

Customer complaints recorded by supervised financial institutions almost doubled in the year ended December 2021, according to Bank of Uganda. 

During the period, Bank of Uganda indicated that customer complaints were filed against, among others, mobile money, mobile banking and agent banking. 

In its 2021/22 Annual Report, Bank of Uganda noted that 517,196 complaints were filed to different supervised financial institutions, representing a 49 percent increase from the 260,299 received in the same period ended December 2020. 

The significant increase, the Central Bank said, was due to the increased impact of Covid-19, which twice forced restrictions and lockdown of the economy. 

The others category, which Bank of Uganda said has several unique categories that are not easily categorised, returned the highest number of complaints, contributing 31 percent of the total number within the period. 

This was followed by mobile money and mobile banking-related complaints, which reported a contribution of 29 percent while agent banking contributed 8.5 percent. 

However, complaints against mobile money and mobile banking were a reduction from 36.9 percent recorded in December 2020 while complaints against agent banking increased, largely due to network disruptions.

A number of customers have previously raised concern on delayed delivered of money banked through agent banking and transactions that are not reflected days after the money has been sent to a user account.  

During the period, Bank of Uganda indicated, a total of 1,157 complaints remained unresolved while 1,324 complaints involved compensation of funds to the complainants. 

However, the report does not indicate how much was compensated in this regard.  

Complaints to the Central Bank are forwarded by consumer in the event that they are not satisfied with the manner in which their issue has been handled. 

A supervised financial institution has 14 days within which it must adequately address a consumer complaint, failure of which a customer is free to escalate the same to the Central Bank’s Financial Consumer Empowerment Mechanism. 

During the period, the Financial Consumer Empowerment Mechanism recorded 300 complaints, of which, 270 were handled and resolved, while 30 remain under process. 

Majority of complaints escalated to the Financial Consumer Empowerment Mechanism related to loans applied for prior to Covid-19, excessive penalties and, in some cases, denial to restructure a loan and a confusion related to terms and conditions. 

However, the Central Bank indicated that investigations had revealed that majority of complaints were due to failure of borrowers to pay required attention to the implication of interest rates, terms and conditions of loan agreement, while others misunderstood the terms of the restructured loans. 

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