Ombud gets R328 million back for disgruntled financial consumers
The National Financial Ombud Scheme managed to get a staggering R328,5 million back for disgruntled financial consumers in the first year of its existence after all four former financial ombud schemes were combined into a single, one-stop, dispute resolution service.
According to its first annual report, the National Financial Ombud Scheme South Africa (NFO) handled an impressive 35 855 complaints through its four divisions, non-life (short-term) and life insurance, banking and credit between 1 March 2024 and 31 December 2024.
Reana Steyn, head ombud and CEO of the NFO, says the sheer number of complaints received and the large sum of money recovered are testament to the NFO's effectiveness and commitment to fairness in dispute resolution and the power of independent mediation.
'This recovery of monies helped individuals and families regain lost financial stability, reinforcing the NFO's role as guardian of justice in financial services. The NFO has continued to solidify its role as a pillar in the South African landscape that ensures access for financial consumers to transparent and effective resolution of disputes.'
The total amount of R328 550 212,58 that the NFO recovered on behalf of consumers is made up of R29 175 451,14 recovered by the banking division, R2 355 840,20 recovered by the credit division, R202 854 491,24 recovered by the life insurance division and R94 164 430,00 recovered by the short-term insurance division.
The NFO resolves complaints on average within 115 days, while the banking division took on average only 52 days to close cases, the Credit division 79 days, the life insurance division 152 days and the short-term insurance division 177 days.
ALSO READ: Banking Ombudsman puts R25 million back in consumers' pockets
Banking division recouped R29 million for consumers
Nerosha Maseti, the lead ombud for the banking division, says in the annual report that despite major internal changes, the banking division adapted seamlessly, handling and resolving complaints at a faster rate than the previous year, while maintaining a strong commitment to fair outcomes.
The banking division opened a total of 15 412 cases and closed 11 535 successfully, recovering a total of R29 175 451,14 consumers. Most of the banking cases opened (20%) was against Capitec that had 1 203 complaints, as can be expected as it has the highest number of customers. The NFO founded in favour of consumers in 22% of these cases.
FNB came in at a close second with 1 017 cases opened, representing 17% of all cases, with findings in favour of complainants totalling 16%. Standard Bank had 998 cases opened, representing 17% of all cases and 19% of findings in favour of complainants.
Nedbank had 881 cases opened, representing 15% of all cases and 22% of findings in favour of complainants, while Absa had 812 cases opened, representing 14% of all cases and 13% of findings in favour of complainants.
The top categories in the banking division were current accounts, personal loans, savings accounts, credit cards and home loans, while fraud remained the leading issue in consumer banking complaints, representing 30% of all cases.
Complaints related to maladministration were the second highest category and debt-stressed consumers the third, reflecting the ongoing financial challenges consumers have to deal with.
ALSO READ: FSCA finds banks do not handle consumer complaints properly
Credit division recouped R2.3 million for consumers
The NFO's credit division successfully closed 2 040 cases, achieving positive outcomes for complainants in 49% of cases and financial redress totalling approximately R2.4 million.
The Retail Credit Solutions (RCS) Group had the highest number of cases opened, totalling 243, representing 17% of all cases opened. The division found in favour of complainants in 44% of the cases.
OPCO 365 was in second place with 133 cases opened, representing 9% of all cases, while Edcon Limited had 126 cases (9%) and DMC Debt Management had 121 cases (9%)
Howard Gabriels, lead ombud for the credit division, says two matters the division dealt with stood out for their systemic impact during the reporting period were about value-added services (VAS) and minimum payment calculations with a number of retailers.
'A serious concern emerged regarding the application of payments on credit accounts where VAS charges, such as airtime or insurance add-ons were not considered in determining the minimum monthly payments, leading to growing balances despite customers paying what they believed to be the full amount due.
'After we intervened, the affected credit provider agreed to write off inappropriate balances and amend its internal policy to ensure VAS charges are included in future minimum payment calculations.'
ALSO READ: Here's what you can learn from Credit Ombud's case file
Non-life division recouped R94 million for consumers
The NFO's non-life insurance division closed 9 289 cases and recovered R94 164 430.00 on behalf of consumers. Edite Teixeira-Mckinon, lead ombud for the non-life insurance division, says complaints related to motor vehicle insurance accounted for 42% of all the complaints finalised/resolved.
This was followed by homeowners' insurance complaints at 27%, commercial complaints at 14%, household contents complaints at 6% and other types of insurance and nonclaim-related complaints, combined at 11%.
'The highest number of complaints about motor vehicle insurance were about claims for accidents, at 62%, followed by warranty and mechanical breakdown claims at 18% and theft and hijack claims at 9%.
'The primary reason for complaints under this category of insurance was claims rejected on an exclusion in the policy. The leading exclusion was failure to prevent or minimise loss or damage, also known as a lack of due care, or recklessness.'
Under homeowners' insurance, the highest number of complaints were about claims for loss or damage due to acts of nature at 40%, followed by bursting of water apparatus at 16% and theft and burglary at 8%.
The primary cause for complaints was rejected claims based on gradual deterioration, lack of maintenance, or wear and tear, while disputes about the amount claimed were also a key issue.
In this division, Santam Limited had the highest number of formal complaints at 684, followed by Standard Insurance Limited at 632, Old Mutual Insure Limited at 613, Absa Insurance Company Limited at 560 and Discovery Insure at 501.
Life insurance division recouped R202 million for consumers
The NFO's life division finalised 5 977 cases in 2024 and recovered a total amount of R202 854 491,24 for consumers.
Denise Gabriels, lead ombud for the life division, says funeral benefits remained the product most consumers complained about, accounting for 45% of complaints. Declined claims were the most common cause for complaints at 56%, followed by complaints about poor service or administration at 34%.
In the life division the most complaints were about Old Mutual at 628 formal cases, representing 18% of all complaints, followed by Liberty with 399 formal cases representing 11%, Hollard Life Insurance with 259 cases representing 7%, Metropolitan Life with 216 cases representing 6% and Sanlam Life Insurance Ltd with 188 cases representing 5%.
Haroon Laher, chairperson of the NFO Board, says the establishment of the NFO was an act of bravery. 'Bravery in anything we do does not merely mean facing the loudest, or sometimes the most powerful, voices. It requires those involved to listen to the quietest whispers of those who have been wronged.
'It takes courage to confront an issue. It is this very courage, carried out through acts of bravery, that will define the NFO in what it does and achieves.'
NOW READ: Funeral insurance tops complaints to ombudsman for long-term insurance
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Maverick
3 hours ago
- Daily Maverick
After the Bell: New reform tracker helps answer the question, ‘Will SA be okay?'
Finally, we are getting a live report card to help us answer this question. Last week, I was asked to be MC at the two launches of the Business Leadership SA Reform Tracker. It has a rather grand title. But, unlike so many other names in the economic and political space, it does what it says on the tin. It is tracking our reforms. Not quite minute by minute, but not far off. As someone who identifies as a 'journalist' and watches everything that happens as much as I can, I'm often asked certain questions by people I bump into, or audiences I speak in front of. The questions are wide-ranging, from 'who should I vote for' to 'should I emigrate', to 'will our economy start to grow now that…' I could go on. But in reality, they're the same question. Everyone who asks me one of those questions is asking something much more fundamental. They're asking, really: 'Will South Africa be okay?' It was a question summed up incredibly well by my old journalistic colleague and friend, Jan-Jan Joubert. He wrote a very well-researched answer and published it as a book. There is something almost peculiar to the South African middle class about this question. I don't think people in New Zealand or, dare I say it this particular Monday, Australia ask themselves this. Or people in the UK or Spain — despite the fact that in both those countries there are serious economic and political problems. But, considering the era of State Capture we have come from, I think it's fully understandable. I mean, look around. In Johannesburg, the mayor blames the DA for the state of the city while he himself has not appointed a finance head, or someone to actually manage the roads. That pothole that you see twice a day? There is actually no one in charge of fixing that right now. Our economy is still growing incredibly slowly, and it seems that people are putting more energy into arguing about the definition of employment than actually making changes that will result in more jobs. Just this weekend we saw a liar, someone who was central to the Guptas, who has been able to use the Hawks to have his ex-wife literally locked up in jail, still mouthing off about the state of the ANC? Malusi Gigaba should be in court. Not being given interview after interview as the chairperson of a portfolio committee in Parliament. But as we all know, there are virtually no Zondo prosecutions. And institutions such as Transnet are still battling to recover from State Capture. Progress However, it's important to note that there is progress. Finally, we are getting a live report card to help us answer the question: 'Will South Africa be okay?' Last week, I was asked to be MC at the two launches of the Business Leadership South Africa Reform Tracker. It has a rather grand title. But, unlike so many other names in the economic and political space, it does what it says on the tin. It is tracking our reforms. Not quite minute by minute, but not far off. Now, when I was at school, my reports were written in quite dry, dull text. They were very different from my tests, in which red was a prominent feature. Here, you get red, yellow and green. So at a glance, you can see how we are doing. But you can also click on each little tile and read what has been written about that sector. It might be that there is progress but still work to do; the story might be a lot more complicated than a single colour can indicate. And, wonderfully, there is also a way for you, perhaps as someone working in one of these sectors, to send some feedback. You might know that something has changed, or that in fact there has been more progress than the tracker is showing. Now, as a journalist, it's tempting to look for the red and start to get a little stroppy with a few politicians. Journalistic instincts But Dr Stuart Theobald, the founder and chairperson at Krutham who put the whole thing together, tells me that we should just wait a little before people like me go back to our journalistic instincts. He acknowledges that, yes, some reforms have stopped because of political problems, or opposition. And some have just failed. But some have been stopped deliberately, because the reform no longer makes sense. In other words, yes it's stopped — but for a good reason. So, if you are interested, it does make sense to actually go a little deeper into each sector, just to see how things really are. I know that one of the reasons you really read this is because you are searching for an answer to that question: 'Will South Africa be okay?' I mean, there is a lot to be worried about. Just as there is in the US, or China, or many, many other places right now. It might be worth just checking in with this tracker from time to time. Perhaps put it on your browser dashboard or something.
TimesLIVE
3 hours ago
- TimesLIVE
SA Rooibos Council pushes for reduction or removal of US 30% tariff
The South African Rooibos Council (SARC) is working with the department of trade, industry and competition and the US embassy to push for the removal or reduction of the new 30% US tariff on South African imports, including rooibos. The SARC said rooibos is a uniquely South African product, grown exclusively in a small region of the Western Cape and not cultivated anywhere else in the world, including the US. 'As such, it poses no competitive threat to American agricultural production or domestic manufacturing.' The council said more than 90% of rooibos exported to the US was shipped in bulk for blending, packaging and marketing by American companies, which supported value addition, stimulated local business activity and created jobs within the US market. It said the full impact on the rooibos industry would become clearer over the next few months, with the US accounting for about 5% of total exports. Though the US was an important market, the industry's exposure was somewhat cushioned by a broad and steadily expanding global customer base, the council said. 'Our priority is to support rooibos producers and exporters during this challenging period,' said SARC chairperson Dawie de Villiers. 'We are actively engaging with stakeholders and exploring all opportunities to ensure rooibos remains competitive in the US market, while also strengthening our presence in other international markets.'
IOL News
4 hours ago
- IOL News
Thungela maintains financial strength despite 80% drop in interim profits
Thungela's full year guidance for export saleable production of 12.8 million tons to 13.6 million tons 'remains appropriate as production is seasonally weighted towards the second half' of the year. Image: File photo Tawanda Karombo Thungela Resources remains in a strong financial position despite an 80% plunge in interim profits for the period to end June, with its stronger balance helping it to continue with strategic investments after paying a R2 per share half-year dividend. Shares in Thungela were 2.74% weaker at R88.17 in afternoon trade on the JSE on Monday, extending the stock's 6% and 5% fall in the past seven and 30 days, respectively. Headline earnings per share (HEPS) for the half-year period to June 30 fell by 80% to 192 cents on the back of lower coal prices on global markets, although its strong balance sheet brightened up future prospects. 'Despite challenging markets, Thungela's balance sheet is strong,' said Greg Davies, head of wealth at Cratos Capital. Thungela has net cash holdings of R6.3 billion, which will help the company by 'ensuring financial resilience' in spite of the 12% plunge in interim revenues to R14.8bn. More importantly, Thungela is set to 'continue (with) strategic investments' such as the Zibulo North Shaft and Elder, which are 'on track' and crucial 'for long-term sustainability as some mines approach closure,' said Davies. Cash flows from operating activities for the half year amounted to R1.2bn. After investing R703 million in sustaining capital expenditure, the company closed the period in an adjusted operating free cash flow position of R484m. 'Our robust balance sheet position enables us to execute on our core strategic priorities. We continue to reserve R500m to complete the Zibulo North Shaft project and a further R300 million to complete the Lephalale Coal Bed Methane project,' said Thungela CEO, July Ndlovu. Despite the HEPS and revenue plunge for the period under review, Thungela is in addition to declaring the R2 interim dividend undertaking a share buyback of up to R140m subject to favourable market conditions. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ndlovu said it was 'appropriate' for the company to maintain 'a cash buffer' of R5bn given the weak coal prices, US dollar weakness and supply chain risks emanating from ongoing trade and tariff uncertainties. Thungela also has undrawn credit facilities of R3.2bn. Global trade and tariff uncertainties currently pervading world markets have occasioned weak demand in key coal demand regions. This has translated to softer prices, a situation reminiscent of the Covid-19 pandemic. Thungela's financial performance for the half-year under review thus reflect the continued pressure on coal prices, with the average realised export prices in South Africa and Australia declined by 11% and 10%, respectively, during this period. The company blamed the softer coal prices as well as a weaker US dollar to South African rand exchange rate, for the revenue plunge. In South Africa, Thungela's export saleable production, however, increased by approximately 300 000 tons to 6.4 million tons mainly due to productivity gains at Zibulo and Mafube. Production at Khwezela was impacted by abnormally high rainfall in the period. The free on board (FOB) cost per export tonne excluding royalties for the period of R1 258 was in line with Thungela's guidance range. Its full year guidance for export saleable production of 12.8 million tons to 13.6 million tons 'remains appropriate as production is seasonally weighted towards the second half' of the year. Consequently, Thungela deems its guidance for FOB cost per export tonne excluding royalties of R1 210 to R1 290 as appropriate. Positively though for Thungela, the South African coal industry continues to benefit from the improved rail performance. It said over the first half of the year, Transnet Freight Rail achieved an annualised run rate of 54.3 million tons compared to 51.9 million tons in the same period a year ago. 'The improved rail performance stems from the ongoing industry collaborative initiatives as well as further optimisation projects, such as the signalling project, which are expected to improve rail performance going forward,' noted Ndlovu. BUSINESS REPORT
