Latest news with #NationalFinancialOmbudSchemeSouthAfrica
The Citizen
10 hours ago
- Business
- The Citizen
Ombud gets R328 million back for disgruntled financial consumers
The National Financial Ombud Scheme handles complaints about banking, life and short-term insurance and credit. 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
IOL News
a day ago
- Business
- IOL News
National Financial Ombud recovers R328 million for disgruntled financial consumers
Since its establishment a year ago, the National Financial Ombud Scheme South Africa placed R328.5 million in the hands of aggrieved consumers who had complained about financial institutions. Image: File Since its launch a year ago, the National Financial Ombud Scheme South Africa (NFO) has recovered R328.5 million for consumers who lodged complaints against financial institutions, the organisation announced in a statement on Friday. The NFO is a single, one-stop, dispute resolution service made up of four former longstanding industry ombud schemes: the Ombudsman for Short-Term Insurance, the Ombudsman for Long-term Insurance; the Credit Ombud and Ombudsman for Banking Services. Services are provided free of charge. Between March 1, 2024 and December 31, 2024, the NFO handled 35 855 complaints that had been dealt with by its four divisions, Non-life and Life Insurance, Banking and Credit. Reana Steyn, the head Ombud and CEO of the NFO, said, 'This recovery of monies has helped individuals and families regain lost financial stability, reinforcing the institution's role as a guardian of justice in financial services. Of the total amount of R328.5 million recovered on behalf of complainants, the Banking division of the NFO recovered R29.2m; Credit R2.4m; Life R202m; and Non-life R94m. With an average turnaround time of 115 days for all complaints that came before the NFO, the banking division performed best, taking an average 52 days to close cases. The credit division took 79 days, life division 152 days and non-life 177 days to resolve complaints. 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 ✕ Ad loading The Banking Division opened a total of 15 412 cases, of which 11 535 cases were successfully closed. Of the five banks with the highest number of cases opened, Capitec led with 1 203. This represented 20% of all cases opened, as can be expected for the bank with the highest number of customers by far. Findings in favour of complainants totalled 22%. FNB came in at a close second with 1017 cases opened, representing 17% of all cases opened, 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. Absa had 812 cases opened, representing 14% of all cases and 13% of findings in favour of complainants. The categories of complaints that kept the Banking Division most busy were current accounts, personal loans, savings accounts, credit cards, and home loan. Fraud remained the leading issue in consumer banking complaints, representing 30% of all cases. Complaints related to maladministration and debt-stressed consumers followed as the second and third highest categories, reflecting ongoing financial challenges faced by consumers. The credit division of the NFO successfully closed 2 040 cases, achieving positive outcomes for complainants in 49% of cases. The Retail Credit Solutions (RCS) Group had the highest number of cases opened, totalling 243. This represented 17% of all cases opened. Findings in favour of complainants totalled 44%. OPCO 365 had 133 cases opened, representing 9% of all cases opened; Edcon had 126 cases opened, representing 9% of all cases opened; and DMC Debt Management had 121 cases opened, representing 9% of all cases opened. During the reporting period, the non-life insurance division of the NFO closed 9 289 cases. Edite Teixeira-Mckinon, lead Ombud: non-life insurance division, said complaints related to motor vehicle insurance accounted for 42% of all the complaints finalised/resolved during the year. 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%. Santam had the highest number of formal complaints opened at 684, followed by Standard Insurance at 632, Old Mutual Insure at 613, Absa Insurance at 560 and Discovery Insure at 501. The life division of the NFO finalised 5 977 cases in 2024 with funeral benefits remaining the product most complained about, accounting for 45% of complaints. Claims being declined were the most common cause for complaint at 56%, followed by complaints about poor service or administration at 34%. Of the five life insurance companies that received the most complaints, 628 formal cases were opened against Old Mutual Life Assurance, representing 18% of all complaints opened. Liberty had 399 formal cases opened representing 11%, Hollard Life Insurance had 259 cases representing 7%, Metropolitan Life had 216 cases representing 6%, and Sanlam Life Insurance had 188 cases opened representing 5%.
