Dealing with a financial services company when you have a complaint can be a time consuming and sometimes frustrating experience. But there is help at hand, which is also free of charge. There is a range of financial services ombudsmen offices in South Africa, each of which specialises in complaints related to a specific sector. Note that you have to give the financial services company involved a chance to resolve your complaint before you take it to the relevant ombud’s office. These are the options available to you:
- The Financial Advisory and Intermediary Services (FAIS) ombudsman – Noluntu Bam deals with all complaints related to financial advisers. However, the ombud is limited to dealing with complaints that relate to incidents after 30 September 2004 and can only award complainants a maximum of R800 000. For example, if an adviser fails to inform you how much his fee will cost or invests your money in a property syndication without carrying out a due diligence first, you can complain to the FAIS ombud.
Case study: Charles Griffiths lodged a complaint against financial adviser, Alwyn Smit after he had initially approached him for advice regarding retirement planning. Smit advised Griffiths to replace his Discovery life assurance policy with an Old Mutual policy. He was also advised to surrender three savings plans and invest the money in an existing Galaxy investment plan. On Smit’s advice, Griffiths also invested money in a Max Investments plan, which he understood would mature when he was 65. However, Griffiths soon found that the automatic premium increases on the Max Investments plan were unaffordable and then discovered that the investment would only mature when he was 75 not 65. He was forced to surrender all three investments as he could no longer afford them and ended up paying massive penalties. The FAIS Ombud found that large upfront commissions influenced Smit’s advice and that his advice had been inappropriate. She ordered Smit to pay Griffiths an amount of R211 442, 56.
Telephone: +27 12 470 9080
- The long-term insurance ombudsman – Judge Ron McLaren: deals with all complaints related to life insurance, dread disease cover, income protection cover, funeral policies and hospital cash plans. For example, typical complaints include cases where insurers did not provide you with sufficient information regarding the terms and conditions of your policy or under what circumstances the policy will pay out.
Case study: The policyholder died without having named a beneficiary on his life insurance policy. His ex-wife claimed the benefit from SAfrican Insurance. She gave the insurer a copy of their divorce order and was paid the benefit of R26 000. However, his mother then lodged a complaint with the ombud stating that she was a pensioner and had covered the funeral costs. The ombud ordered Safrican Insurance to pay the benefit to the mother.
Tel: 021 657 5000 or 0860 103 236
Sharecall: 0860 662 837
- The short-term insurance ombudsman – Dennis Jooste: deals with insurance complaints related to household contents and building cover, vehicle insurance, cellphones, travel, credit protection insurance. For example, a claim may relate to a declined claim where you feel that the claim should have been paid out.
Case study: The complainant bought a secondhand car and a month later, the engine caught alight while he was driving the car. Although the complainant had taken out comprehensive insurance, the insurer, Lion of Africa Insurance, declined the claim on the basis that the damage fell within a specific exclusion dealing with wear and tear, mechanical or electrical breakdown or failures. However, the ombud pointed out that fire was an insured peril under the comprehensive car policy and ordered the insurer to settle the claim in full.
Tel: 011 726 8900
Sharecall: 0860 726 890
- The credit ombud – Manie van Schalkwyk: handles all complaints related to your credit profile, for example, if the information on your credit profile is incorrect.
Case study: The complainant accidentally paid money into a credit card that had already expired. She immediately asked the bank to correct her error. However, when she later applied for more credit, the bank turned her down on the grounds that she had a bad credit rating. On querying the matter at the credit bureau, she found that the correction she requested had never been made and her credit record now reflected a default payment. The complainant again contacted the bank and requested that her credit record be corrected. But after almost two months, this had not been done. The credit ombud ordered the credit bureau to immediately correct her credit record.
Tel: 0861 ombuds or 0861 662 837
- The pension funds adjudicator – Muvhango Lukhaimane: investigates all complaints related to pension funds including retirement annuities, pension funds and provident funds. For example, a complaint could relate to the split of a couple’s pension fund interest on divorce.
Case study: The complainant told the PFA’s office that he had never received a benefit statement from his employer, WRS Security Services, confirming that he was a member of the Private Security Sector Provident Fund or what his fund credit was. An amount of R187.50 was deducted from his salary every month as a provident fund contribution. However, the provident fund told the PFA that WRS Security Services was not registered as a participating employer and the fund had no record of the complainant’s benefit. It is compulsory for employers in the private security industry to join the Private Security Sector Provident Fund. WRS Security Services was ordered to register with the fund and to submit all outstanding contribution schedules to the fund so that the complainant’s arrear contributions could be calculated. The company was also ordered to pay the fund all the arrear contributions along with late payment interest and to provide the complainant with a copy of his latest benefit statement.
Tel: 012 346 1738 or 012 748 4000
So, regardless of your complaint, there is an ombud available to help you. When you log a complaint, it helps to take all the emotion out of the complaint and provide a chronological account of events. Make sure that you include as much relevant information as possible, such as policy numbers and your date of birth.
- This article was first published in City Press on 25 May 2014.