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.
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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%.
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7 hours ago
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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%.
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The National Financial Ombud Scheme (NFO) has placed R328.5m in the hands of aggrieved consumers in its first year of operation. Of those who complained about financial institutions, common targets were car damage claims, funeral policies and extras added onto retailers' accounts. The ombud's office handled 35,855 complaints between March 1 and December 31 2024 across its four divisions: non-life and life insurance, banking and credit. Reana Steyn, head ombud and CEO of the NFO, said the sheer number of complaints received and the large sum of money recovered are testament of the NFO's effectiveness and commitment to fairness in dispute resolution and the power of independent mediation. 'The 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.' The non-life insurance division of the NFO closed 9,289 cases. A total of R94m was recovered on behalf of complainants. Edite Teixeira-Mckinon, lead ombud: non-life insurance division, said complaints related to motor vehicle insurance accounted for 42% of all complaints finalised/resolved during the year.
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Discover the critical differences between employer medical boarding processes and disability insurance criteria as highlighted by the National Financial Ombud Scheme of South Africa. Learn how these distinctions can impact your disability claims. Image: Motshwari Mofokeng/Independent Newspapers A medical report does not automatically qualify an employee for disability insurance, according to the National Financial Ombud Scheme of South Africa (NFO). It said, while medical reports serve as key evidence, the employer's medical boarding policy may differ significantly from the criteria used by insurers to determine eligibility for disability benefits. The (NFO) describes itself as 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. 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Gabriels highlighted two cases where employees were medically boarded but had their disability claims declined. In one instance, a Code 14 truck driver suffered vision loss in his right eye, undergoing multiple medical procedures. When he applied for income disability benefits through the group scheme's insurer, his claim was declined as it did not meet the policy's medical criteria. One year later, while still receiving specialist treatment, his employment was terminated due to ill health. His employer did not assist him with the claim process, instead advising him to appeal the insurer's decision. Under the policy terms, the driver needed to be classified as disabled under the Own Occupation clause, which meant he had to be unable to perform duties specific to his job. However, given his profession, the policy automatically referenced Any Occupation, meaning he had to prove that he was unable to perform any other role in the open labour market. Although the insurer acknowledged his inability to drive a heavy-duty truck, they deemed him capable of performing other tasks, including driving a light motor vehicle. His appeal was denied because he could still undertake alternative employment. Meanwhile, his employer terminated his services before the claim was finalised, without considering redeployment to a different role. The NFO stepped in, questioning whether it was reasonable to expect a 57-year-old truck driver with impaired vision to re-enter the labour market. Following further discussions, the insurer reconsidered and approved his claim. 'The NFO asked the insurer to reconsider its decision based on fairness and equity. Following further consideration, the insurer agreed to pay the claim. 'In deciding on disability claims, insurers have a responsibility to be fair and unbiased. The insurer should consider the individual's specific circumstances and attributes when assessing the risk,' Gabriels says. 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