Banking Compliance Issues in Botswana Highlighted by Ombudsman’s Report

According to the banking industry’s ombudsman, a staggering 10 to 15 percent of complaints received last year were related to fraud. This highlights growing concerns about the prevalence of illegal practices in the sector.

Measures Taken by Banks to Combat Fraud

In recent times, local banks have implemented various measures to curb fraud, including:

Discontinuing special clearance of cheques
Introducing stricter controls on daily withdrawal limits
Placing a P500,000 limit on the value of cheques, with amounts exceeding this threshold requiring the use of SWIFT (Society for Worldwide Interbank Financial Telecommunications)

Advanced Technology Contributes to Growth of Fraud

However, the introduction of advanced technology and paperless transactions has inadvertently contributed to the growth of fraud.

Fraudulent Activities a Major Concern in 2009

According to Gabriel Maotwanyane, the Banking Adjudicator, fraud was one of the biggest challenges of 2009. A significant proportion of complaints against banks resulted from fraudulent activities.

Fraud involving debit/credit cards and ATMs, particularly in cross-border transactions, was a prominent issue last year.
Consumers were warned to be vigilant when using their ATM cards, as criminals clone cards under the guise of swiping them.

Tips for Avoiding Fraud

To avoid falling victim to fraud:

Never let your ATM card out of your sight, even if the service person wishes to swipe it.
Scrutinize the locations of ATMs you use and avoid out-of-the-way machines that are often used by fraudsters.

Educational Campaign Planned to Raise Awareness about Transactional Fraud

To combat this trend, Maotwanyane announced plans for a comprehensive educational campaign designed to raise awareness about transactional fraud among consumers. The campaign will be carried out through various channels:

Radio
Fliers
Billboards
ATM notices
Bank statements
Individual bank branches

Review of Office of the Banking Adjudicator Planned for 2009

The Office of the Banking Adjudicator is set to undergo a review this year, using benchmarks set by the International Network of Financial Ombudsmen (INFO) to ensure compliance with international standards.

The review was initially planned for last year but was delayed due to budget constraints brought on by the global recession.
Maotwanyane emphasized the importance of the review, noting that it will help bring Botswana’s banking adjudicator in line with international best practices.