Latest news with #NationalFinancialOmbudScheme
IOL News
21-07-2025
- Business
- IOL News
Navigating the complexities of insurance claims in South Africa
Explore real-life stories of insurance claim disputes in South Africa, highlighting the challenges faced by policyholders and the importance of understanding your rights. Image: SAPS It seems that everyone has a story to tell about insurance companies seemingly trying to get out of settling claims. One recent one involved someone who was hijacked. If that isn't traumatic enough, the jacker then went on a joy ride around the Alexandra township, near Sandton in Johannesburg, completely writing off the car before stripping it bare.' There was no car left to recover. And the only reason it was recovered was because she phoned the tracking company. The insurance company had insisted that she use a policy-mandated tracking device. To use a tired cliché, to add insult to injury, that person's insurance company tried to argue that the car was written off instead of forcefully stolen. Many policies have a clause saying that you have to give permission for someone else to drive your car, and this statement looked suspiciously like the insurance company trying to get out of paying her. There are two obvious things wrong with this. The first is that the accident wouldn't have happened had the car not been hijacked, while the insured also argued back that permission was given. Through coercion. At knife point. A point confirmed with a broker. Yet, Jaco Rupping, COO and shareholder at ASI Financials, says: 'In South African contract and insurance law, consent obtained through intimidation or threat of harm is not true consent'. Another example I have heard is when an insurance company refuted a claim from a homeowner to fix damage because a wall had fallen over. In this instance, the company argued that they had never inspected the structure. The same structure, they never asked to look at. Then there is the case of a laptop that was insured for replacement value under all risks and was accidentally damaged beyond economic repair. Laptops are fairly mission-critical, and it took a week for the insurance company to start actually working on the claim after the laptop was inspected. Twice: once by their service provider and once by the client's. When the insured lost her temper with the insurance company, they insisted they needed to get a quote first, which had somehow recently become policy and was, despite the device being insured, in line with common sense, for replacement value. The claim was eventually paid out, two weeks after being lodged. Rupping says turnaround times in claim assessments should always be reasonable. 'In this case, once a device has been confirmed beyond economic repair by both the client and the insurer's external assessor, it would be expected that the insurer act without undue delay,' he notes. There are likely many more similar stories out there. However, Hannes Bester, Manager of Adjudication at the National Financial Ombud Scheme, tells Personal Finance that the ombud hasn't seen 'a significant number of overturns on declined claims'. This, says Bester, may be attributed to most insurers conforming to principles of treating customers fairly. The Ombud's 2024 annual report shows that most of the complaints resolved during the year were about motor vehicle insurance, which was followed by issues related to homeowners' insurance, and then other types of complaints, including house contents. Rupping says many of the complaints stem not from outright 'rip-offs', but rather from breakdowns in communication, mismatched expectations, or poor claims handling from both parties. 'That being said, insurers have a legal and ethical obligation to act in good faith, and clients are fully within their rights to escalate claims they believe are being unfairly denied or unreasonably delayed,' he says. Bester explains that an insurer can decline a claim if the insured is in breach of a condition or warranty entrenched in the policy agreement. Other reasons for declining a claim include an exclusion in a policy that will result in cover being denied for that sort of claim. As an example: 'The policyholder is involved in an accident, and he was driving the vehicle whilst intoxicated. The policy agreement specifically excludes cover if the driver is under the influence of alcohol.' Bester says that, under these circumstances, the insurer can decline the claim. The same would go for if the damage was caused by a lack of maintenance or if premiums weren't paid, for example, he says. Rupping notes that: 'Insurers are entitled and, in fact, obligated to investigate the circumstances of a loss'. Bester says, in instances where claims are denied, consumers should first engage with the insurance company's complaints department. 'If this proves to be unsuccessful, the insured may explore other forums such as obtaining legal advice with a view to litigate,' or approach the ombud, he says. PERSONAL FINANCE
IOL News
24-06-2025
- Business
- IOL News
Major banks under scrutiny as NFO reports increased consumer complaints and significant recovery outcomes
One year after the NFO was established, it says thousands of consumers have been helped. Image: Supplied The National Financial Ombud Scheme (NFO) has released worrying statistics indicating that South Africa's largest banks are at the centre of a growing wave of consumer complaints, with over 5,900 cases registered in 2024 alone. This alarming trend underscores the pressing need for better banking practices and reinforces the role of the NFO as a crucial mediator between consumers and financial institutions. Established just a year ago, the NFO has already made significant strides in protecting consumer rights, successfully recovering approximately R328.5 million from various financial entities across the nation. This independent body acts as a watchdog for fair treatment, helping clients reclaim their funds when disputes with banks, insurers, and credit providers arise. The National Financial Ombud Scheme is investigates the operation of South African banking institutions Image: Supplied Breaking down the data, the NFO highlighted that the banking division alone opened a total of 15,412 cases, successfully closing 11,535 complaints, an achievement that reflects a sharper turnaround in response time compared to the previous year, according to Nerosha Maseti, lead ombud for the Banking Division. In terms of recovery, the breakdown shows considerable disparities among banks: Capitec Bank: 1,203 complaints (20% of banking cases), with 22% ruled in favour of consumers. 1,203 complaints (20% of banking cases), with 22% ruled in favour of consumers. First National Bank (FNB): 1,017 complaints (17%), with 16% consumer wins. 1,017 complaints (17%), with 16% consumer wins. Standard Bank: 998 complaints (17%), 19% ruled for consumers. 998 complaints (17%), 19% ruled for consumers. Nedbank: 881 complaints (15%), with 22% consumer wins. 881 complaints (15%), with 22% consumer wins. Absa: 812 complaints (14%), 13% ruled for consumers. The leading cause of these grievances remains fraud, accounting for 30% of all complaints. Following closely behind were issues related to maladministration and the struggles of debt-stressed consumers, signalling areas where banks must critically reassess their service delivery and client engagement strategies. Maseti emphasised that the NFO's commitment to fair outcomes has not wavered, despite significant internal changes. The organisation's efficient resolution processes aim to ensure that consumers feel empowered and supported in their financial dealings. As South African consumers grapple with an array of financial challenges, these findings urge a dialogue about the need for greater transparency and accountability in the banking sector, pivotal to restoring trust in South Africa's financial ecosystem. DAILY NEWS
IOL News
23-06-2025
- Business
- IOL News
Are SA's financial institutions ghosting their customers?
The National Financial Ombud Scheme (NFO) has revealed that South Africa's five largest banks accounted for the majority of banking complaints The National Financial Ombud Scheme (NFO) has revealed that South Africa's largest banks accounted for the majority of banking complaints received in 2024, with a total of over 5,900 cases opened against them. Since its establishment a year ago, the NFO has recovered approximately R328.5 million for consumers who lodged complaints against financial institutions across the country. The NFO is an independent body that helps consumers resolve disputes with banks, insurers, and credit providers. It acts as a watchdog for fair treatment and helps people get their money back when things go wrong.
IOL News
23-06-2025
- Business
- IOL News
Are SA's big banks ghosting their customers?
The National Financial Ombud Scheme (NFO) has revealed that South Africa's five largest banks accounted for the majority of banking complaints The National Financial Ombud Scheme (NFO) has revealed that South Africa's largest banks accounted for the majority of banking complaints received in 2024, with a total of over 5,900 cases opened against them. Since its establishment a year ago, the NFO has recovered approximately R328.5 million for consumers who lodged complaints against financial institutions across the country. The NFO is an independent body that helps consumers resolve disputes with banks, insurers, and credit providers. It acts as a watchdog for fair treatment and helps people get their money back when things go wrong.
The Citizen
23-06-2025
- Business
- The Citizen
More to be done to curb rip-offs by banks and insurance companies
In 10 months, consumers had a staggering R328 million extracted unfairly from them. If there is something South Africans love to moan about, it is the battles they have with companies in the financial services sector. Banks and insurance companies, both of which constitute 'grudge' purchases, are the main culprits. Now, the National Financial Ombud Scheme's report – just for the period between March and December last year – shows that we're not imagining the poor treatment which gets doled out to us by these institutions. In those 10 months, consumers had a staggering R328 million extracted unfairly from them. That is almost a shocking R1 million a day that saw money going to these enterprises by unfair means. It was life insurance where the ombuds scored the biggest gains for policy holders, recovering just under R203 million for them. Short-term insurance was the next biggest culprit, with R94 million being returned to policy holders for unfair decisions by insurers. By comparison, banks did reasonably well, racking up just over R29 million in money returned to their clients for various wrongdoings. The credit sector looks good with just over R2 million returned to its customers after disputes. Ombuds say the companies are improving their service and systems… but clearly a lot still needs to be done. NOW READ: Ombud gets R328 million back for disgruntled financial consumers
