A financial services provider is required to debar a representative if it has sufficient and credible evidence that reasonably supports a finding of a lack of honesty and integrity, the Financial Services Tribunal (FST) has confirmed.
Momentum Metropolitan Life Limited debarred Mpho Felicia Masebe, a former telesales agent, based on allegations of fraudulent activity relating to a funeral policy in the name of a “Ms M”.
The policy was initiated on 13 December 2023 with a monthly premium of R882. On 11 January 2024, days before the first premium deduction was scheduled, the policy was changed, increasing the premium to R1 672.
An attempt to deduct the premium failed, prompting an investigation by Momentum’s quality assurance (QA) team. The QA report identified several significant inconsistencies in the information provided by Masebe:
- Masebe said the client banked with African Bank, but she only entered the word “African” into the system. Momentum said this is a well-known tactic to bypass internal verification controls, enabling policies with invalid bank account numbers to be processed.
- Bank verification services confirmed that the bank account number provided for the policy, was invalid.
- No premiums were received for the policy, and it lapsed shortly after inception.
- The policy was enrolled and modified based on verbal consent, with was recorded. Investigations conducted with two credit bureaus found that the cellphone number was not linked to Ms M’s identity number or her residential address. Consequently, Momentum concluded that Masebe did not speak to Ms M but to a “ghost caller”.
- The policy lead was not obtained through the company’s official channels; instead, it was generated as a “referral” by Masebe. This meant that the responsibility for verifying the client’s information rested entirely with her.
The investigation’s findings were shared with Masebe, and she was requested to respond to them. She did not respond but resigned in August 2024, citing unforeseen personal circumstances as her reason for leaving.
During the debarment hearing in November 2024, Momentum highlighted a two-hour gap in the system’s audit trail, indicating that Masebe first entered the client’s identity number and date of birth, but recorded the phone call later. It was submitted that this sequence suggested a non-linear conversation with the client, and a potential disconnect between the initial information and the final transaction details.
Masebe’s main defence at the hearing was that she followed established procedures. However, she could not provide a source for the client’s lead and failed to provide an affidavit from Ms M to support her version of events.
Grounds for reconsideration
In her reconsideration application, Masebe denied having any knowledge of fraudulent intent or practices, asserting that she acted in good faith and accurately recorded the information provided by the individual she believed to be the client.
Masebe argued that Momentum’s system should have flagged and rejected any invalid details, suggesting that if a loophole existed, the responsibility lay with the system rather than with her.
Masebe further contended that she was unaware of the ongoing investigation at the time of her resignation and denied that her departure was linked to the investigation.
Additionally, she believed that the debarment process was initiated as a punitive action after she started seeking outstanding payments.
In a late submission to the Tribunal, Masebe asked to present additional evidence in the form of a transcript of the recorded telephone conversation. She argued that this transcript would demonstrate that she mentioned “African Bank” during the call.
Momentum did not oppose the introduction of the new evidence. However, it reiterated that the central issue was not the specific words spoken, but the identity of the person on the other end of the call, which is still in dispute. The respondent maintains that the call was a “ghost call” and that the transcript did not change the substance of the charges.
Evidence supports a pattern of misconduct
The Tribunal’s decision characterised Momentum’s case as cumulative, built on several points that, when taken together, pointed to a pattern of conduct inconsistent with the duties of a financial services representative.
The conclusion that the policy was sold with the involvement of a “ghost caller” was derived from objective facts. First, credit bureau records showed the cellphone number was not linked to the client’s identity number. This directly contradicted the premise that the conversation was with the policyholder. Second, there was no evidence that Ms M was involved in the process, because she did not submit a signed affidavit to the Tribunal, despite Masebe’s claims that she would.
The Tribunal evaluated Masebe’s new evidence, the transcribed telephone conversation, in this context. Although Masebe argued it proved that she said, “African Bank”, the Tribunal noted that the greater weight of the evidence indicated the voice at the other end of the call was not that of the client. Therefore, even if the transcript were to show that she used the correct bank name, it did not fully address the more serious charge that the entire conversation was conducted with a proxy, not the actual policyholder.
The Tribunal further considered Masebe’s insistence that she entered “African Bank” on the system. It concluded that the existence of a loophole in the system, even if proved, was not an excuse for an agent to exploit it. Momentum was entitled to conclude that such an action, particularly when combined with other irregularities, was intentional and served to circumvent its verification processes.
Masebe’s defence that she was unaware of these fraudulent practices, and that the debarment was retaliatory for a separate dispute over unpaid commissions did not carry sufficient weight to counter the compelling factual inconsistencies raised by Momentum. Her inability to provide a concrete source for the lead, coupled with the detailed audit trail and the existence of a call with an unverified number, eroded her claim of innocence.
On a balance of probabilities, the Tribunal found that Momentum could reasonably conclude that Masebe’s actions demonstrated a fundamental lack of honesty and integrity.
As a result, the Tribunal dismissed the application for reconsideration.
