The importance of proper record keeping

The Buthelezi determination by the FAIS Ombud, signed on 12 January 2016, highlights again the need for accurate record keeping and the dangers inherent in not completing an application form fully whilst at the client.

The Complainant purchased a vehicle from a dealership in Secunda in June 2011. He visited Estene Brokers’ offices in Secunda, in order to secure insurance for the vehicle. The Complainant claims he was guided as to the areas he should complete in the proposal form. He later handed the form to the employee and left Estene’s premises. Following acceptance of the Complainant’s proposal, the insurance contract came into existence on 2 June 2011.

The vehicle was stolen at gun point in Morningside, Durban, during March 2013.

The Complainant’s resultant claim was rejected by Santam following the latter’s establishment that the vehicle, contrary to the terms and conditions of the contract, had not been fitted with a tracking device.

The Complainant claimed that he was never advised at any stage of the requirement of a tracking device.

Following the rejection, Complainant sought and obtained amongst others, copies of the insurance schedule, proposal form, Client Mandate and Letter of Engagement, including the Record of Advice from Respondents.

Upon examining the proposal form, he immediately noticed that the page dealing with the tracking device had been completed with the word Netstar. It appeared to Complainant that the blank spaces in the proposal form were filled afterwards by someone who uses Afrikaans without consulting him and without his consent.

The Respondents did not dispute that the remainder of the form was completed by an employee of Estene, but claimed that the information was obtained telephonically by the employee from the Complainant.

A large part of the determination, as well as the final outcome, hinges on the Respondent’s inability to provide proof that such a telephone call was indeed made, and the acceptance of a partially completed application form.

During the investigation of this matter, it became apparent that Respondents, in contravention of the General Code, had accepted a partially completed proposal form from Complainant. In fact, almost half the page dealing with the tracking device was left blank. This is demonstrated by Respondents’ own papers. To cover themselves, Respondents invented the story about the telephone call that was made by Spaumer.

They do not state the date of the call and provide no corroborating evidence to back their claims of the call. Most importantly, they do not explain the reasons for accepting a signed blank form from Complainant.

The Respondents were ordered to pay the Complainant an amount of R317 500.00 within 7 days from date of the determination being signed.

Click here to read the full determination.

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