How did the FAIS Ombud fare against its goals in the 2017/2018 financial year?
Nhlanhla Nene, previous Minister of Finance, states in the Foreword of the FAIS Ombud Annual reports that “the overhaul of the country’s regulatory architecture for the financial sector reached a major milestone in April 2018 with the launch of the Financial Sector Conduct Authority and the Prudential Authority”. According to Nene the next milestone in this reform journey will be the launch of the overhauled Ombud scheme to drive the financial sector to serve South Africans better.
To address the shortcomings of the current fragmented system, the Financial Sector Regulation Act (Act 9 of 2017) creates an Ombud Council, a statutory body tasked with ensuring that customers are able to access effective, independent, fair and timely dispute resolution. Nene further referred to the Ombud Council that will set rules for the Ombud schemes to drive consistent approaches and adherence to minimum best standards. The Act further requires that all financial institutions belong to an Ombud scheme if one exists for its line of business.
Besides all the regulatory changes in the last year, the FAIS Ombud also experienced a change in leadership with the appointment of the new FAIS ombud, Mr Naresh S Tulsie, on 1 May 2018.
This year the Annual Report once again provides a review of the performance of the Office of the FAIS Ombud as well as reports on its financial affairs.
Complaints received during the financial year 2017 – 2018
The Annual Report reflects that the Office received a total of 10 211 new complaints, a slight reduction from the 10 846 received during the 2016/2017 financial year. Of the total complaints received, 22% was Non-FAIS and 78% justiciable. This is the second consecutive year that this Office has received more than 10 000 complaints within one financial year, which also saw this Office resolve a total of 10 542 complaints.
Resolution of complaints received
- 4 749 (46,5%) was dismissed
- 2 687 (26,3%) was referred
- 883 (8,6%) was settled
- 1 892 (18,6%) was carried over
The quantum of settled / determined cases also showed an increase from R58 343 824 in 2016/2017 to R60 889 786 in 2017/2018.
How complaints were resolved
In other words, out of 10 542 complaints handled by the Ombud, only 1 440 cases were settled (1 392) and determined (48) in favour of the public. 6 303 were dismissed and 2 799 were referred elsewhere for resolution. The previous annual report showed a total of 1 073 resolved out of 11 025 cases. This year therefore shows an increase in the cases resolved, from 9, 7% to 13,66%.
(The perennial challenge for the Ombud, and raised every year on this platform for the past 5 years, concerns the number of cases dismissed. This year’s figures show a sharp rise to over 6 000 of the 10 542 complaints which should not have landed up at this office in the first place. It is all well and true boasting about the number of complaints received, but when 60% of what you do consumes a substantial amount of your staff’s productive time, it is time for change. Small wonder it takes years to resolve complaints in an office where the mandate is the speedy resolution thereof – editor)
It is interesting to note where those complaints that did not fall under the jurisdiction of the Ombud landed up.
Products complained about
As in the previous year, short term insurance (3 243) again formed the majority of complaints received, together with long term insurance at 3 100. Investment, retirement and medical complaints in total came to 1 634 only.
Complaints received by province
Complainants domiciled in Gauteng remained the source of the majority of complaints received by this Office, with 41.8% of all complaints being received from this province, which was followed by the Western Cape and Kwa-Zulu Natal at 14.5% and 14.3% respectively.
The report further concludes that the numbers confirm that South African consumers have put their faith in the FAIS Ombud.
An appeal from a consumer whose complaint had been dismissed by the Office wrote:
‘We, like most people who are in their twilight years, entrusted our finances with xxxxxx bank, a reputable institution. When these institutions take advantage and behave like they have done in our case, our only hope is watchdogs like the FAIS Ombud, whom we know is obliged by law to consider the facts and apply the law without fear or favour…’
Click here to view the statistics of the annual report