The Financial Services Tribunal has set aside Clientèle Life’s debarment of a representative after the insurer’s call record contradicted several allegations in its debarment notice. The Tribunal also criticised Clientèle’s approach to the matter and raised concerns about its voucher advertising and sales script.
The ruling, delivered on 25 September 2026, did not exonerate the former representative. The Tribunal said he had failed to demonstrate the highest ethical standards by proposing that the client take out a policy in a friend’s name while paying for it. But this conduct had not been clearly identified in the debarment notice as the basis on which he allegedly no longer met the honesty and integrity requirements.
In response to questions from Moonstone about the Tribunal’s criticism, Clientèle said its Royalty benefit was offered to policyholders at no additional cost, and its approved sales script prohibited representatives from using the benefit to induce clients to take out policies.
The former representative was appointed by Clientèle Life Assurance Company Limited and Clientèle General Insurance Company Limited as an authorised representative in July 2025. He resigned on 26 January 2026, before an internal disciplinary inquiry could be held, but Clientèle continued with the debarment process.
The allegations arose from a call he initiated with a client on 19 December 2025. The client said he wanted to cancel a funeral policy and get his money back. He told the representative that he was unemployed, survived on R350 a month, and disputed the deductions from his account.
Clientèle submitted that the representative’s mandate was limited to selling new policies and did not extend to servicing existing policies or resolving problems with them. It alleged that he led the client to believe he was assisting with the cancellation of the policy and the refund of premiums when he was instead selling an alternative funeral plan.
According to Clientèle, the representative did not immediately direct the client to the appropriate department. Instead, he continued the call for more than an hour, discussed vouchers, and sold the client another funeral policy using the identity number of the client’s friend.
Clientèle held a debarment inquiry on 26 February 2026 and notified the representative of its decision the following day. It found that he had engaged in serious dishonest conduct.
The representative’s response
The former representative challenged the debarment on procedural and substantive grounds.
On the merits, he denied that he had acted with deliberate dishonesty. He maintained that offering the client an alternative funeral policy was within his authority and consistent with Clientèle’s retention practices. He contended that the client had made an informed decision before proceeding with the alternative policy.
He also argued that there had been no forgery, impersonation, or unlawful benefit to him from the transaction. In his view, debarment was disproportionate, and a lesser sanction would have been more appropriate.
Call record contradicts key allegations
The Tribunal found that the call record contradicted several allegations in Clientèle’s debarment notice.
Regarding the allegation that the former representative had failed to direct the client to Client Services, the Tribunal noted that he repeatedly said he would provide the number so the client could cancel the existing policy. The call summary recorded that he eventually supplied the number, although he emphasised that the client would lose access to the vouchers if he cancelled.
Although the debarment notice referred to both cancellation and a refund, Clientèle conceded at the hearing that its allegation that the representative had failed to advise the client to contact Client Services was inaccurate.
The Tribunal also found that the call record did not support the allegation that the representative had failed to tell the client he was taking out a new funeral plan.
The decision quotes the representative as saying: “Remember this is a new policy with the new policy number.” The Tribunal noted that he also distinguished it from the first policy, which the client could contact Client Services to cancel. Clientèle conceded that the debarment notice was factually incorrect on this point.
The Tribunal then considered the allegation that the transaction had been completed without the client’s consent to debit his account. The transcript recorded the representative asking whether the client gave Clientèle permission to debit his account with R366 for the insurance cover. The client answered: “Yes.”
Clientèle agreed that the word “give” had been omitted from the transcript and conceded that the client had consented to the debit. The Tribunal therefore said the allegation in the debarment notice was inaccurate.
However, the Tribunal treated the client’s consent to the debit separately from the representative’s proposal to issue the policy in the friend’s name while the client paid the premiums. It later identified that proposal as the conduct that fell short of the highest ethical standards.
Voucher representations and sales script come under scrutiny
During the hearing, Clientèle contended that the representative had misled the client because it did not offer free vouchers. The decision also records Clientèle as saying its staff were exploiting the voucher system to attract clients and earn commission.
When Clientèle was asked what measures it had taken to manage and mitigate the risks associated with selling products under its approved script, its representative could not provide an answer.
The Tribunal said Clientèle’s allegation that the former representative had failed to follow the approved script was inaccurate. It also said the script was misleading because it advertised vouchers as free when, in the Tribunal’s view, they were not free.
Elaborating on its response to Moonstone, Clientèle said Royalty was offered to new and existing policyholders at no additional cost, although the benefit continued only while the policyholder paid the monthly premium.
It said representatives were required to explain the insurance policy and conclude the sale before introducing Royalty. According to Clientèle, this requirement was emphasised during training and thereafter.
Clientèle also qualified the statement recorded in the decision about staff exploiting the voucher system. It said its representative at the hearing had been referring to individual representatives who might transgress its requirements and had not intended to suggest that exploitation was widespread. The insurer said it had strict compliance processes and took formal action when it identified non-compliance.
The Tribunal referred to the client’s complaint that he understood the vouchers to be free and that Clientèle would not deduct money from his account, but amounts were nevertheless being deducted while he was unemployed. It said the complaint should have prompted an enquiry into whether the representative had followed a prepared script that misled clients and was open to abuse by sales consultants.
The former representative was unable to identify the script on which he said he had relied.
He also said Clientèle’s sales culture allowed representatives to explain policy benefits and offer an alternative when a client wanted to cancel. The Tribunal noted that Clientèle did not dispute this account at the hearing.
Conduct fell short of ethical standards
The Tribunal said representatives entrusted with providing financial services had to adhere to the highest ethical and professional standards.
Although it said the former representative had not demonstrated the highest ethical standards, it described Clientèle’s approach to the matter as “less than exemplary”. It said that, had the matter been taken more seriously, Clientèle could have helped to establish standards for inexperienced representatives and for the benefit of the public.
Why the debarment could not stand
The factual discrepancies were significant because the Tribunal had to determine whether Clientèle had established the grounds stated in its debarment decision, not merely whether aspects of the sales call were objectionable.
The Tribunal said the “principal difficulty” was that the conduct said to constitute the breach of the FAIS Act had not been clearly identified in the debarment notice.
It also found that Clientèle’s blanket statement that dishonest conduct had been established fell short of section 14(3)(c) of the FAIS Act, which requires clear reasons for a debarment decision.
The Tribunal concluded that the reasons for the debarment had not been established in the context of the case.
In its response to Moonstone, Clientèle acknowledged that the matter should have been handled better substantively, particularly through clearer drafting of the charges. However, it said its representative disputed some of the contentions recorded in the ruling.
Clientèle maintained that the sales call, considered in its entirety, provided grounds for debarment and confirmed that it would proceed with a fresh hearing.
The Tribunal separately rejected the former representative’s procedural challenge. It found that Clientèle had sent the proposed grounds for debarment to his recorded email address, invited him to listen to the call, and given him an opportunity to respond. Clientèle had therefore complied with the FAIS Act’s minimum procedural requirements.
The Tribunal upheld the reconsideration application and remitted the matter to Clientèle to begin the debarment process afresh.
