FAIS Ombud releases its Annual Report for the financial year 2015/2016

The Office of the FAIS Ombud once again improved upon the results achieved during the previous financial year, and resolved nine thousand two hundred and eighty nine (9289) complaints during the past financial year ending 31 March 2016.

“Our greatest task has been to resolve complaints in terms of our mandate and to do so in a way that creates shared value for all our stakeholders.

‘The combination of increasing consumer complaints and operational demands that are inevitable in a growing organization have created a challenging yet stimulating environment for complaints resolution. We have taken to stride lessons that we have learnt from the issues that we have been confronted with and have constantly endeavored to enlighten those that we serve”, says Ms Bam.

“Access to the office is therefore vital because in addition to being a forum that is open to consumers of financial products to voice their grievances…it alerts consumers to both their rights and responsibilities when a financial service is rendered to them.”

The Office this week officially releases its 2015-2016 Annual Report, which reflects an increase in the number of new complaints from 9003 in the previous financial year to 9891 in the 2015/2016 financial year. The quantum of settled/ determined cases showed a 7.14% percent increase from R 46 630 471 in 2014/2015 to R50 215 518 in 2015/2016.

Ms Bam says, “From the time the office first evolved under the leadership of the late Charles Pillai, the main focus of the office was to prioritise consumer awareness and access. Through our own creativity and meaningful partnerships we have realised significant gains in this area. We took the fight for access a step further by highlighting and measuring it in our internal processes. Although there is a lot to be proud of today, we are mindful of the struggles experienced by the consumer in reaching our office. Their stories are contained in the complaints.”

“Many complaints which appear to be about contractual terms have their origin in unsound or inappropriate advice. While there may seem to be no correlation between advice and access to the office, consider the example of a bank customer who entrusted proceeds of her immovable property while house hunting for a smaller home. In less than three months she had found the home. She signed an offer to purchase and went to the bank to retrieve her funds, only to be told that she was bound by the contract she had signed, which effectively saw her money land in an insurance product and had to remain there for ten years. She was made to sign forms acceding to heavy penalties, after which the remainder was paid into her account. The bank employee she was dealing with did not direct her to the FAIS Ombud because; the consumer was ‘in breach of the contract’. It was the consumer’s persistence to see justice being done that led her to the FAIS Ombud. Following a decision by this office, the bank had to pay back the penalties confiscated from the consumer’s investment.” says Ms Bam.

“Due to the intangible nature of financial products, the consumer has no opportunity to identify the incongruence between their needs and what the product can really do. Unlike tangible products, there is no opportunity to examine the product or even put the product to test. The consumer relies on the advice of the person advising them and accepts their attestations of what the product will do. By the time the consumer awakens to the limitations of the product, the damage has already been done; by then it is the consumer’s recollection of the advice, against the contract document.” says Ms Bam.

The FAIS Ombud’s Annual Report launch takes place on Friday 11 November 2016 at the CSIR Convention Centre in Pretoria.

To see the FAIS Ombud Annual Report click here.