So you want a super Ombudsman
A couple of years back we recall a slight tiff between two of South Africa’s consumer complaints institutions. The FAIS Ombud stepped on the toes of the Ombudsman for Short-term Insurance by essentially overturning one of the latter’s ruling. At the time the atmosphere at the respective offices could be described as ‘frosty’ at best. Some time after the spat, Charles Pillai, then FAIS Ombudsman, talked about the possibility of a super Ombudsman to tackle all domestic financial services complaints.
He envisaged something similar to the UK-based Financial Ombudsman Service (FOS). Given the Financial Services Board’s penchant for emulating its UK peer we cannot discount such a development in the future. A super Ombudsman creates a central point for the resolution of every financial services complaint imaginable. It creates cost, administration and operational efficiencies to the direct benefit of the consumer. A ‘wronged’ consumer no longer has to worry about which Office presides over his case – nor deal with the time wasting that occurs when a case is passed tossed from one office to the next.
Sending the Ombudsman to the phone booth
What makes the FOS a super ombudsman scheme? The UK consumer protection body comprises a number of Ombudsmen rolled into one. It entertains complaints relating to banking, insurance, mortgages, pension, savings and investments, credit cards and store cards, loans and credit, hire purchase and pawn broking, money transfers, financial advice and stocks, shares unit trusts and bonds. And if we left anything out we’re sure they’d find a space for that too.
Although the UK has a similar total population to South Africa, the levels of penetration and saturation of financial product is vastly different. This is reflected in the FOS 2009/10 annual review. In the 12 months to 31 March 2010 the scheme received an impressive 925 095 enquiries. Of the total enquiries received approximately one in six morphed into full blown disputes, requiring the involvement of adjudicators and ombudsmen. They resolved a record 166 321 of these disputes over the period, with approximately half of the cases leading to some form of compensation for consumers. If you think the case load sound excessive then consider for a moment the number of unprocessed complaints at South Africa’s Pension Funds Adjudicator. We’d have to match the latest FOS processing statistics for a number of years to make a dent in that backlog!
The FOS states it employed, on average, 1 015 individuals through FY2010. And At 31 March 2009 they employed 793 employees split among Ombudsmen (34), adjudicators (410) and other (349). There are plenty of other interesting facts and statistics in the latest report. Trends from the latest year show a sharp spike in insurance disputes (+38%) and banking and credit complaints (+30%), while 52% of the cases originated at just four of the UK’s largest financial servicesgroups. The UK-based super Ombudsman scheme resolved 38% of all disputes within three months and the balance within sixmonths. But it cost a packet – with the FOS burning through £92 million in FY2010.
A bridge too far
The FOS guidelines and objectives are loosely in line with the mandates any one of South Africa’s consumer protection institutions adhere to. They operate independently and impartially. They look carefully at both sides of a story and weigh up all the facts before making a decision. And they have powers to put the matter right in the event a financial services business has acted wrongly. Will South Africa eventually establish a super Ombudsman scheme? Merging a number of disparate organisations – some voluntary and some legislated – will require extensive planning and consultation. If the local regulators continue to implement best practices from overseas jurisdictions, you can be sure we’ll have a similar scheme in the not to distant future.
Editor’s thoughts: There’s a great deal of gray area in the world of financial services complaints. In many instances the complainant is torn between going after the financial adviser (at the FAIS Ombudsman), or the product provider (at the Long-term or Short-term Ombudsman). Choosing the wrong channel could have undesirable financial consequences. Would you welcome a single ombudsman scheme to hear all financial services complaints? Add your comment below, or send it to gareth@fanews.co.za
Comments
We have, on numerous occasions, advised SA Home Loans that Mrs Oosthuizen was retrenched 23 August 2021, and Mr Oosthuizen's income is insufficient.
The insurance paid out for several months. We were not advised when the last payment was made by the insurance. When we eventually found out that payments were no longer being paid, nearly a year after payments had not been made, when attempting a vehicle trade-in that was declined. On insisting why we were declined we were told that it was something to do with our home loan.
Mrs Oosthuizen contacted SA Home Loans to make payment arrangements and was told that they refuse to help and declined assistance.
We attempted debt counselling, again, in both our names, but the debt counsellors refused to include the home loan.
We have attempted, without success, to sell the property and have previously requested SA Home Loans to repossess the property, but they just keep telling us to try and sell. In the meantime it just goes further into arrears, which we cannot afford.
We had a prospective buyer in December 2023, which was turned down by SA Home Loans, because the price was insufficient. If they refuse to give a settlement figure, which the did when we asked, how were we supposed to know how much to ask for the property so that all costs would be covered.
We have even attempted to rent out the property to cover the bond repayments, and have moved off the property, but have not been successful here either.
In the meantime the property is vacant and is in a situation prone to vandalism and squatting, as SA Home Loans was not willing to be of assistance when we approached them. My brother-in-law has just informed us that the curtains that were in the house have been stolen and there is cause for concern regarding the delay in 'foreclosure' that the property may undergo more vandalism.
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