Whilst Ombud determinations receive fairly wide coverage, the same does not apply to cases where a settlement is reached between the complainant and the respondent.
We extracted the cases discussed in the FAIS Ombud’s latest annual report to assist readers in comparing their own procedures to ensure it is in line with requirements.
One interesting case concerns the disclosure of termination charges.
The respondent argued that the percentage charged was contained in the documents signed by complainant. However, there was no evidence to prove that this had been disclosed to complainant and it was further noted that it would not suffice for the respondent to convey the percentage charged. There was a duty for it to have reflected the amount in specific monetary terms as the Code demands where the amount is reasonably ascertainable.
Another case involved the “consolidation” of all the clients’ investments into one policy. Despite the clients being informed that this would be treated as a reinvestment, and no fees would be payable, they noted that R26 141 were in fact charged. Coupled with this was a maturity date of 2029 for clients aged 82 and 76, respectively.
We sometimes wonder about the regulatory authorities talking about “mis-selling”. These cases prove that it is, unfortunately, still happening, and on a regular basis.
Please click here to download the full document on settlements.