Moonstone Monitor 7 February 2008

Mixed Emotions for the Ombud

The FAIS Ombud, Mr. Charles Pillai, delivered probably his most damning determination last week, days after an Appeal Board of the FSB upheld an appeal against an earlier resolution handed down by him.

In the appeal by SA Home Loans the members of the Appeal Board found that the complainant's husband was in effect uninsurable, and would not have been able to obtain life cover at equal or better rates anywhere else. SA Home Loans was therefore ordered to repay premiums plus interest only, whereas the Ombud had determined that they should pay the full outstanding bond amount.

From the notes on the appeal it appears that there was negligence on the part of the agent who had concluded the transaction with the deceased's wife, but as things currently stand, it appears that this will not be addressed. It will be interesting to see whether the FSB will take further steps against SA Home Loans. Not complying with the requirements of the FAIS Act is an offence. Merely firing the operator should not be the end of the matter.

In last week's determination Mr. Pillai roped in a number of powerful resources in addressing the issue of misselling by providers of credit insurance. It was reported that the JD Group had indicated that they would accept the determination, and referred to it as an isolated case which happened in 2005. They stated that the persons involved did not follow the procedure prescribed by the company, and that a lot of training has been, and is being conducted to ensure compliance with the legal requirements.

The introduction of far more stringent regulations to curb reckless provision of credit would no doubt have added to the awareness of the folly of duping unsuspecting illiterate clients; unfortunately it does not apply retrospectively, as is born out by this case. How many of those affected know of the complaints resolution mechanisms in place, never mind have the ability to employ it?

The introduction of regulation of the financial services industry had in mind a shift in focus away from product flogging to the provision of appropriate advice. This is most unlikely to happen without a mindshift at corporate level. Finding a scapegoat does not resolve the cause of the problem which is, in the words of Ayn Rand "...the moral failure of those who evade the fact that there can be no compromise on basic principles."

Is u Lisensie op Datum?

Mens moet dit seker nie hardop sê nie dat u FSB lisensie nie jaarliks hernu hoef te word soos in die geval van u motorlisensie nie; netnou kry sekere mense idees. Daar is egter sekere vereistes wat u moet nakom ten einde te verseker dat u inligting op u lisensie by die reguleerder op datum en korrek is.

Ondervinding het ons geleer dat daar veral twee dinge is wat Makelaars warm onder die kraag maak: onnodige papierwerk en swak diens. Dit geld veral wanneer dit gepaard gaan met wat die Engelse ‘n “grudge purchase” noem; iets waarvoor die lisensie vir die meeste van ons lesers kwalifiseer.

Benewens die vereiste om gelisensieer te wees ten einde finansiële advies en tussengangerdienste te kan lewer, is daar ook baie streng riglyne oor veranderinge aan die voorwaardes soos uiteengesit op u lisensie dokument. Hieronder is ‘n lys van wysigings wat binne 15 werksdae amptelik aan die Raad op Finansiële Dienste oorgedra moet word, tesame met die koste daaraan verbonde.

1. Naamsveranderings, Omskakeling van Beslote Korporasie na Maatskappy of andersom en verandering of wysiging van die handelsnaam van u besigheid: R285
2. Byvoeg van Sleutelpersoon: R251
3. Byvoeg van finansiële produkte: R821
4. Wysiging van Voldoeningsbeampte: R342
5. Wysiging van ouditeur: R160
6. Opgradeer van Kategorie I na Kategorie II lisensie: R9713

Die volgende wysigings is gratis:
1. Verandering van makelary inligting (kontakbesonderhede of -persoon, adres, finansiële jaareinde, bankbesonderhede ens.)
2. Verandering ten opsigte van direkte bemarking
3. Verandering in aandeelhouding, lidmaatskap of direksie van maatskappy of BK
4. Opdateer van kwalifikasies, vaardigheidskrediete

As enige van die items hierbo gelys op u van toepassing is, skakel ons gerus vir hulp. Ons ondervinding tydens die aanvanklike proses, toe ons meer as ‘n derde van alle suksesvolle aansoeke help prosesseer het, maak ons die ideale platform om u by te staan met enige behoeftes wat u ten opsigte van bogenoemde mag hê. Die feit dat ons aansoekers in Afrikaans kan help maak ‘n groot verskil vir ons kliënte.
As gemagtigde liggaam is Moonstone se fooie dieselfde as dié van die RFD, behalwe dat ons genoodsaak is om ook BTW te hef.

Dit is baie interessant dat ons die afgelope tyd 'n groot toename in nuwe aansoeke om lisensies ontvang het. Nuwe aansoekers kan vir hulself baie tyd en moeite spaar deur eers ons aanvanklike vraelys te bekom by [email protected]. Sy sal vir u laat weet watter vorms om te voltooi (en watter nie!) sowel as die koste daaraan verbonde.

Enige navrae kan gerig word aan Karin van Wyk by 021 883 8000 of per e-pos na [email protected].

Paul se Perspektief/ Paul's Perspective

In response to last week's article in which Hollard stated their approach to claims arising from losses incurred as a result of load shedding, an interesting point was raised by Marieke van Linge:

"Most insurers agree that the alarm system should have a back-up battery, which should last 6-12 hours, and which means that outages should not affect the alarm, as they seem to be mainly in 2 hour stretches. Should the alarm thus not be working during load shedding, they would NOT cover the loss."

Another reader advises that we should no longer refer to load shedding "black outs"; the politically correct term is "previously lit".

Daar was onlangs 'n hofsaak in Duitsland waarin 'n onderwyseres haar skoliere (eksuus, leerders) daarvan aangekla het dat hulle haar reg op privaatheid geskend het deur 'n webtuiste op te rig waarop onderwysers beoordeel kon word deur leerders wat vir hulle punte toegeken het. Sy het haar saak teen die leerders verloor. Dit het my egter laat wonder oor die klagtes wat ons gereeld van lesers ontvang, en of dit nie dalk iets is wat die moeite werd is om te ondersoek nie?

Daar bestaan 'n blad vir verbruikersklagtes, Hellopeter, maar dit is op 'n baie breër basis geskoei as net die finansiële dienste bedryf. So 'n blad hoef natuurlik nie net 'n "wailing wall" van klagtes te wees nie; inteendeel, ek sou dit eerder as positiewe aanwyser wou gebruik om krediet te gee aan produkverskaffers wat dit verdien. Dalk is dit raadsaam om plek te maak vir beide komplimente en klagtes, wie weet. Ek hoor graag u mening hieroor.

Two incidents recently made me aware that I am not informed enough about exactly how the new credit provision regulations work:

I received a call from a major bank where I have a credit card, inviting me to transfer the funds available on the budget part of my card to the "straight" section for immediate use at a preferential interest rate of 13%. To my question of why I should want to do that the response was: "You never know when you might need it." How is that for a needs analysis?

Another major bank is offering cash for people who open a current account. I could not determine whether there were any qualifying requirements, but my understanding had always been that a current account is for the more sophisticated user who also understands the resultant higher costs involved. One example is the overdraft facility which my bank was happy to provide free and gratis in the past as I paid interest when I used the facility. Now I pay interest and I pay a fixed amount per month, whether I use it or not. It certainly made me think, didn't it?

The problem is that I cannot go to another bank for this reason as they also charge these fees.

Ndisatshaya
Paul Kruger

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