WORDS ON WEALTH
By Martin Hesse
Because we tend to spend more over the summer holiday period and because it’s a good time of year to review our investments and insurance policies, I thought to devote this column to the recourse you have through the various ombuds if you have problems with product and service providers.
Some ombuds and complaints mechanisms have been established by law and fall under specific Acts of Parliament. Examples are the Ombud for Financial Services Providers, the Consumer Goods and Services Ombud, the Tax Ombud and the Pension Funds Adjudicator. These are known as statutory ombuds.
But there are also ombuds established by the financial services industry, as a way of the industry governing itself. These include the Insurance Ombud (a single ombud now controls two offices, that for short-term insurance and that for long-term insurance) and the Ombudsman for Banking Services.
Both statutory and industry ombuds now fall under the recently established Ombud Council, overseen by the Chief Ombud, Leanne Jackson. This council was established because, according to National Treasury, the low number of complaints received by both statutory and voluntary schemes relative to the number of financial transactions pointed to poor consumer awareness and possibly poor accessibility. There was also concern about gaps in what the ombuds covered and differences in approach.
The Ombud Council operates as the regulator of both statutory and voluntary schemes, with the authority to standardise best practices and promote and coordinate cooperation.
Complaint-resolution services provided by the ombuds are free of charge to the consumer, but the ombuds do have limits regarding the value of the claim. Note that you should only go to the ombud after trying to resolve the complaint with the provider.
Below are six ombuds you need to know about, to whom you can complain about a financial service or product.
1. Ombud for Financial Services Providers
Commonly referred to as the FAIS Ombud, because of its association with the Financial Advisory and Intermediary Services Act, this active and well-resourced office deals mainly with complaints against financial advisers, be they independent or tied to a big financial institution. “Advice” in this context refers to advice that is directed at the sale of financial products: these may be investment or insurance products or even cryptocurrencies (recently included in the legal definition of “financial product”). Note that the ombud deals with complaints about whether the advice you received when buying the product took your personal circumstances into account and whether the product was suitable for you. Website: www.faisombud.co.za
2. Insurance Ombud
As mentioned above, there are two offices under this ombud: one deals with short-term insurance (the insurance of things) and the other with long-term insurance (life and disability cover, as well as other products life insurers offer, such as certain types of investment policies). Most complaints concern the rejection of claims by the insurer, and the ombud makes decisions on what is fair and equitable, not necessarily according to the letter of the law. In other words, if the ombud believes the small print in a policy has disadvantaged you unfairly, the decision may go in your favour. Websites: www.ombud.co.za (long-term) and www.osti.co.za (short-term).
3. Tax Ombud
This ombud, which is independent of the South African Revenue Service (SARS), protects the rights of taxpayers against possible abuses by SARS and has made a significant impact in promoting consumer awareness about those rights. The mandate of the ombud is to review and address any complaint by a taxpayer regarding a service matter or a procedural or administrative matter arising from the application of the tax laws by SARS, and to bring to the government’s attention any systemic and emerging issues related to tax collection. Website: www.taxombud.gov.za
4. Pension Funds Adjudicator
The office of the Pension Funds Adjudicator was established through amendments to the Pension Funds Act. The office deals with complaints related to pension funds, such as problems with the distribution of pension fund payouts, the collection and investment of pension fund contributions, and the governance of pension funds. The types of funds governed by the Act are: stand-alone pension and provident funds, umbrella funds, preservation funds, beneficiary funds and retirement annuity funds. Website: www.pfa.org.za
5. Ombudsman for Banking Services
This body was established by the banking industry and governs members of the Banking Association of South Africa (in other words, all South Africa’s major banks). The ombud ensures that banks comply with the association’s code of conduct, and deals with complaints relating to products and services provided by your bank. It won’t, however, deal with your bank’s commercial decisions on lending or credit, interest rates or bank charges, unless there has been maladministration on the part of the bank. The ombud has been active in promoting awareness of security issues, especially regarding online transactions. Website: www.obssa.co.za
6. Consumer Goods and Services Ombud
Established under the Consumer Protection Act (CPA), the mission of this ombud is to maintain fair play in the consumer industry by guiding and improving compliance with the CPA and promoting fair business practices, educating consumers as to their rights and redress available to them should a company breach the Act or the code of conduct, and provide for a scheme of alternative dispute resolution as described in the Act. The ombud only has jurisdiction over retailers, wholesalers and manufacturers that subscribe to the Consumer Goods and Services Industry Code of Conduct. Website: www.cgso.org.za
This article appears in the December 2022 edition of our free digital magazine, IOL MONEY.
FIGHT BACK AGAINST FRAUD
The Southern African Fraud Prevention Service (SAFPS) is a non-profit organisation that helps consumers and businesses combat fraud, financial crime and identity theft through education and various means of protection. The agency does the following:
- It maintains and provides a powerful fraud database to assist members in detecting and preventing fraudulent activity, and protecting consumers against identity theft and impersonation.
- It provides Protective Registration for consumers who have experienced identity fraud, ID/Passport theft or have had their identity compromised, to protect them against further losses.
- It designs, develops and promotes innovative solutions, systems and tools to assist in combating fraud and financial crime, and protecting consumers.
Protective Registration provides an added layer of protection and peace of mind, whether your identity has been compromised or not.
“If you want to become proactive in the fight against fraud, the SAFPS is there to serve you. Visit our website on www.safps.org.za. Click on the fraud prevention tab and protect yourself against identity theft with Protective Registration,” says Manie van Schalkwyk, chief executive of the SAFPS.
As a further measure, the SAFPS can issue you with a Victim of Impersonation letter, which you can share with credit providers to assist in any verification processes.
PERSONAL FINANCE