Ombud Complaints Analysed
A reader recently pointed out an interesting statistic published in the FAIS Ombud’s annual report. Less than 20% of the complaints received in the last year, concerned investments. He says that, if you extract those in respect of property syndications, this number would be considerably lower.
Complaints about investments were beaten into third place by Long term- (29.17%) and Short-term Insurance (26.7%).
I have fun dissecting these figures every year. Although 8 821 complaints were received, 4 180 (47%) were referred elsewhere. Of the balance remaining, a further 2 924 (27%) was dismissed. In other words, of the complaints received, 74% were either invalid, or not meant for the Ombud’s office.
In the year, there were 1 116 settlements where the respondent agreed to make good the complainant’s loss. There were only 25 determinations, compared to 91 last year. This was mainly due to an exceptional number of findings against Orange insurance in the previous year.
A further 1 474 cases were carried over to the new year.
Making the sums add up correctly, is virtually impossible, as there are carry-overs from one financial year to the next.
In his report, Minister Pravin Gordhan quotes David Llewellyn, an expert on financial sector regulation: “On the whole, consumers place enormous trust in the advice they get from salesmen, unaware of the probable conflict of interests. Even where the trust has manifestly been misplaced, the individual concerned may not realise that they were given bad advice until years later, unless there is a regulator to intervene actively. Such a time-bomb of undetected bad advice does huge damage to the credibility of the industry when it eventually explodes.”
It is for this very reason that it is extremely difficult to judge the current status of compliance in the country by looking at what happened at the Ombud’s office in the past year.
On the other hand, there can be little doubt that there is far greater knowledge of what is required than before the regulatory exams were introduced. This is most noticeable in conversations I have on a daily basis with intermediaries. It would really be a pity if something done in innocent ignorance, years ago, now comes back to bite one.
Unfortunately, ignorance is no excuse before the law. We are judged on today’s reality, not that of yesteryear.
To download the full report, please click here.