The newly formed National Financial Ombud scheme (NFO) started operating on 1 March after being granted recognition by the Ombud Council.
The NFO is the outcome of a project to amalgamate four financial sector ombud schemes: the Credit Ombud, the Ombudsman for Banking Services (OBS), the Ombudsman for Long-term Insurance (OLTI), and the Ombudsman for Short-term Insurance (OSTI). These four schemes have now become divisions within the NFO.
The Ombud Council granted the NFO recognition, in terms of the Financial Sector Regulation Act, as an industry ombud scheme on 23 February.
The Council has revoked the recognition of the four predecessor schemes, with effect from midnight on 29 February.
The NFO was originally scheduled to go live on 1 January, but implementation was delayed to 1 March because more time was required to sort out the scheme’s governance and administration processes.
Read: New implementation date for National Financial Ombud
All the services and assistance previously provided to individuals and companies by the four predecessor schemes are now available through the NFO, at no cost to consumers.
A media statement issued by the NFO described the new scheme as a “one-stop, all-in-one dispute resolution service”. This may be in true in respect of credit, bank, and insurance products, but the NFO is not yet “a one-stop shop” when it comes to all the complaints that may arise from the gamut of financial products and services.
Complaints related to financial advice or intermediary services still need to be directed to the FAIS Ombud, while the Pension Funds Adjudicator deals with complaints related to retirement funds and members’ benefits. The JSE Ombud has also yet to be brought within the fold of the NFO.
The launch of the NFO does mark an important milestone in the creation of what will eventually be an “all-in-one dispute resolution service” for financial consumers, as envisaged in National Treasury’s proposals to reform the ombud system.
Read: Key aspects of Treasury’s proposals to reform SA’s financial ombud system
Transitional measures
For at least the next six months, consumers and financial institutions can continue to use the predecessor schemes’ contact details to access the NFO’s services.
But it’s not necessary to go that route. The NFO’s website has gone live. The website provides the NFO’s contact details and has an online complaint submission function. It also has a link explaining the complaints process.
The NFO’s Rules set out the scheme’s powers and how complaints must be adjudicated.
Any complaints that were in the process of being dealt with by one of the predecessor schemes before 1 March will be managed to completion by the NFO, Leanne Jackson, the chief executive of the Ombud Council, said in a notice published on 23 February.
“The amalgamation to form the NFO is expected to leverage the success of their predecessors while providing a streamlined, co-ordinated, and less confusing alternate dispute resolution framework for financial customers,” the NFO’s statement said.
“The long history of assisting financial customers in their respective sectors to obtain redress for unfair treatment by financial institutions, free of charge and with minimal formality, is a hallmark of the ombud service consumers have come to expect and value,” the statement quoted Reana Steyn, the OBS, as saying.
“We believe that both the financial customers and the participants of the scheme will benefit significantly as a result of the new single-entry point process, with the same rules applicable to all types of complaints.
“In addition, it will be easier to create awareness and educate consumers about the existence and mandate of the single scheme, as opposed to trying to explain the function of four separate schemes,” Steyn said.
She said the other benefits of the new scheme are improved administrative efficiencies and harnessing the predecessor schemes’ institutional knowledge, expertise, and staff experience, which was built up over more than 20 years.
