FAIS Ombud urges consumers to be aware of the insurance on black Friday mobile deals

Black Friday shopping has been in the country for a little over a decade and South Africans enjoy spending money during this time. Every retailer will be putting forth their best offers to attract customers.

The Office of the FAIS Ombud would like to warn consumers who take out insurance for their mobile devices. Consumers can find themselves in situations where their claims are not being paid due to them being unaware of the conditions attached to the insurance.

The Office of the FAIS Ombud has investigated many complaints where a complainant’s cell phone was either stolen or went missing, and the claim was rejected by the insurer for non-compliance with the requirements of the policy. One example involved a complainant who submitted a claim with the insurance company for a lost phone. The insurer subsequently rejected the claim as it stated that the complainant was not using the SIM Card that was issued with the device. This was a requirement in terms of the policy.

In investigating the complaint, the Office of the FAIS Ombud found that the respondent had failed to advise the complainant that she needed to keep the registered SIM Card or cell number in her phone as it appeared on the application for insurance.

According to section 7(1)(c)(vii) of the General Code of Conduct for Authorised Financial Services Providers and Representatives (‘the Code’), a Financial Services Provider (‘FSP’) must provide concise details of any special terms or conditions, exclusions of liability, waiting periods, loadings, penalties, excesses, restrictions, or circumstances in which benefits will not be provided to the client.

The Office found that the FSP had not complied with this section of the Code, as it had not placed the complainant in a position to make an informed decision and had failed to provide the complainant with the relevant information. As a result, the complainant did not comply with the requirements of the policy.

The Office of the FAIS Ombud made a recommendation to settle the matter and replace the complainant’s device for the value of R6999.00, which was accepted by the respondent.

It is important that prospective clients of insurance policies be aware that FSPs must disclose all material terms of the proposed policy to ensure that they are placed in a position to make an informed decision. Consumers are urged to ask questions regarding the material policy conditions before signing.

Consumers who wish to lodge a complaint with our Office can do so by emailing detailed information to [email protected], visiting the complaints portal on our website, calling our Office on (012) 762 5000 or on our Share call number 086 066 3274 for further assistance.