Let us look back at 20 May 1997; a landmark date for the matter of customer complaints, specifically Valerie Elsie Cornwell Durr, who on that day came to the end of a David and Goliath type battle against Absa Bank.
The appellant, Durr, was successful in her action against the defendant, specifically around conduct; having suffered loss from the charming and polite representative who placed her funds in a supposedly safe investment that was anything but safe.
May 1997 represented the culmination of a long journey for Durr to achieve final justice for the unprofessional conduct and advice that was provided to her.
A strong case for an Ombud
To me, this case more than any other case represents strong motivation for the establishment of a cost-effective complaints mechanism such as an ombudsman (Ombud); which was of course duly constituted by the advent of the Financial Advisory and Intermediary Services (FAIS) Act in 2002.
Today we almost take the existence of an Ombud's office for granted. The question, however, is whether consumers are sufficiently empowered to win the complaints' battle with product providers? And on the flipside of the coin, are the providers sufficiently sensitised to the complaints process?
Culture change
Of course the culture within the financial services industry has been almost turned on its head since the Durr action where the caveat emptor - buyer beware - philosophy ruled supreme and customers had limited channels to pursue product providers who they felt had not provided services in their best interests.
The advent of the FAIS Act was the first step in the plethora of consumer protection legislation which has followed since. Of course, all the legislation in the world cannot help consumers who are ignorant or greedy, or a combination of both. And indeed, it is not intended to do so. Consumers will always have an obligation to ensure that they read and are empowered. However, they must have access to fair and accurate information laid out in plain language.
New laws
The Treating Customers Fairly (TCF) framework has thrown complaints' handling into the forefront of this fair treatment crusade. One of the first areas the Financial Services Board looked at in its initial TCF industry surveys indeed related to complaints' handling.
Industry players will attest to the efficiency of their complaints' handling regimes, however, there is no doubt that differing standards currently apply across the industry.
Pleasing the masses
There have been notable successes in consumer education and empowerment; yet, the various Ombuds' offices receive more complaints and award ever larger sums of compensation. Do these larger numbers of complaints mean that the industry is simply going from bad to worse, or is it a case of consumers slowly but surely becoming empowered with knowledge in respect of the channels of recourse that are available to them? I would like to think, and indeed believe, it to be the latter option.
The crystal ball
Looking five years ahead, the fair treatment of customers has been in place for some time and our regulator has been applying a principles-based oversight regime for the last two or three years, which has given industry sufficient time to absorb and understand the requirements/expectations of the regulator. All product providers have been hard at work ensuring that their customer complaints' regimes are streamlined and efficient with adequate fulfilment surveys in place to ensure that all are walking the talk.
The consumer is being presented with products that are simpler and more transparent with a good level of prescribed disclosures as required in terms of Minimum Product Disclosure Regulations.
The number of complaints has dropped as the legacy issues that the industry experienced have largely disappeared and the consumer is generally happier. I hope this is not a utopian picture that I am painting. I guess only time will tell.
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