Repeated conduct that breaches the honesty and integrity requirements cannot be excused by alleged ambiguities in a financial services provider’s internal policies and must result in debarment, the Financial Services Tribunal (FST) has found.
In the case that came before the Tribunal, the applicant, Vongani Reuben Baloyi, was debarred by King Price Insurance Company in March this year. According to King Price, Baloyi no longer complied with the fit and proper requirements.
The core reason for the debarment, as articulated by King Price in its notice of intention to debar, was Baloyi’s alleged deceitful creation of “phantom or ghost quotes”. In 2024, while providing non-life insurance quotes, Baloyi reportedly requested information about clients’ spouses or other persons during calls, then used this information to generate additional quotes under those individuals’ names without their knowledge or consent to perform ITC (credit bureau) checks.
Specifically, King Price submitted that Baloyi generated quotes from the same client call using two different identity numbers – one with ITC consent from the primary client and the other without consent. This conduct was said to artificially inflate Baloyi’s quote per person per day, a key performance indicator tied to his commission structure, thereby providing him with unjust financial benefits.
King Price said its underwriting system requires scripting to be read verbatim to the client, with explicit ITC consent obtained before processing a quote. The absence of the spouse or other person on the call meant no such consent could be validly obtained, violating the company’s “Dos and Don’ts” document, which prohibits ghost quoting and selling, including creating quotes without ITC consent or with no client on the line.
Equally central to King Price’s decision was Baloyi’s alleged loading of invalid referrals on the system without client knowledge or consent, leading to undue referral payouts. King Price detailed five instances, occurring from 22 July to 27 November 2024.
In its version, Baloyi manipulated the system by changing digits in spouses’ cellphone numbers to bypass built-in blocks designed to prevent duplicate or similar quotations for related individuals. The underwriting system is engineered to identify matching client profiles and block consultants from generating referrals if a spouse is already insured with King Price, as reinforced by an email reminder sent to the sales team in July 2024.
This conduct also violated the “Dos and Don’ts” document, which prohibits changing clients’ personal information such as phone numbers or email addresses. King Price submitted that quoting the same risk with different personal information without asking for a referral amounted to dishonesty.
Submissions by the applicant
Baloyi contested his debarment, primarily on the grounds that the allegations against him were unfounded, lacked sufficient evidence, and stemmed from ambiguities in company policies rather than intentional dishonesty.
In response to the notice of intention to debar, dated 4 March 2025, Baloyi disputed the allegations of deceitfully creating phantom or ghost quotes and loading invalid referrals. He submitted evidence that he had obtained clients’ consent and followed established procedures. Specifically, he argued that King Price’s procedure document was silent on the matter of spousal consent, implying no explicit prohibition.
Baloyi claimed he proved beyond reasonable doubt that all clients were fully aware of quotes being generated in their own names or their spouses’, with spouses either called or present during discussions in some instances. He addressed the five specific incidents cited in the notice, stating that some lacked merit and sufficient evidence.
Another aspect of Baloyi’s defence was King Price’s alleged failure in oversight and support. He noted that all other audits conducted over his two-year tenure found no breaches, leading him to believe his procedures were correct. He highlighted a lack of training or coaching beyond his initial appointment, which contributed to any perceived errors.
Despite his denials, Baloyi submitted that he took full responsibility for his actions and was willing to learn from his mistakes. He described the situation as a “lesson learnt” and pledged to correct his behaviour, framing it as an unintentional mistake rather than a material contravention of the FAIS Act.
In his reconsideration application, Baloyi contested the factual basis of the allegations and highlighting inconsistencies in King Price’s policies and processes.
Baloyi denied creating ghost quotes, asserting that the insurer’s internal audit quality assurance found no wrongdoing in his alleged conduct. He claimed he was even rewarded R250 for each of these audits.
Baloyi argued that King Price had a policy treating husband and wife as “one”, allowing an adviser to quote both on the same call without obtaining separate consent from each. He submitted there were no clear guidelines on spousal consent for policies, permitting quotes and ITC consents to be conducted with either spouse during the quotation and the finalisation stages. He argued that using a non-participating spouse’s information (with the participating spouse’s agreement) was to provide options to clients, not to deceive.
Assessment against expected conduct standards
The Tribunal conducted a factual inquiry to determine whether the alleged conduct was established. It found that the incidents referred to in the notice of intention to debar did take place and were not denied by Baloyi.
The FST rejected Baloyi’s primary defence that his actions were consistent with company policy of treating husband and wife as “one”. The Tribunal found that although Baloyi argued this policy or practice justified his conduct, “it does not make logical or legal sense that ICT checks, obtaining risk profile, and generating quotes may be done on the other non-participating spouses or persons”. Instead, it made more legal sense that both spouses should be on the same call to obtain consent and the verbatim reading of relevant script to take place”.
The Tribunal assessed Baloyi’s conduct against the expected standards for a representative under the “Dos and Don’ts” document and the FAIS Act’s requirements of honesty and integrity. It found that the repeated deviations were not in line with these standards. The Tribunal noted that the incidents occurred on a number of occasions over a period of time, reinforcing the severity of the breach.
The FST cited Baloyi’s acknowledgment of wrongdoings during his representations to King Price and his submission that he took full responsibility as a “lesson learnt” as placing the factual basis of the debarment beyond dispute.
