Financial ombud returns R39 million to consumers

The financial advisory and intermediary services (Fais) ombud, which handles disputes in the sector, put more than R39 million back into consumers’ pockets over the past financial year.

But the office of ombud John Simpson will be bowing out of its involvement in the more than 1 000 property syndicate related complaints announced in its 2022-23 annual report, released on Friday.

According to the report, the ombud received 6 483 complaints that were within its jurisdiction, of which 4 796 were resolved, during the period. It ensured a settlement was reached in 29% of the cases, collectively awarding R39 133 121 in compensation to consumers. 

Simpson said his office had not needed to issue any determinations during the financial year because respondents and consumers had cooperated to resolve the disputes.

“The office’s aim is to resolve disputes in the most expedient and conciliatory way possible, as this approach benefits both consumers and the financial service providers (FSPs). Determinations are regarded as a last report option which should only be used if all other efforts to resolve the matter have failed,” he said.

“In achieving this aim, it was not necessary for the office to issue any determinations for the financial year. Disputes were resolved by ongoing interaction and discussion with the parties. The cooperation by the FSPs in this regard is appreciated and commended.”

Simpson said the more than 1 000 property syndication complaints his office had received and opened files for 2009 to 2014 had “presented a serious problem for the office”.

“Numerous determinations on these matters were set aside by the Financial Services Tribunal and the office engaged in ongoing litigation with the respondents in the high court, which was largely unsuccessful. The office was no closer to successfully resolving these complex and highly disputed matters than it was when they were opened, more than 10 years ago,” he said.

A decision had to be made whether the office was the appropriate forum to resolve these disputes.

“Matters where the determinations were set aside by the tribunal and were referred back for reconsideration — in some cases more than once ­— were closed as being more appropriate for a court of law. The office is in the process of withdrawing from the various property-syndicate-related high court litigation matters in which it was involved,” Simpson said.

He said his office “sincerely sympathises with the mostly elderly consumers who were affected by the failure of these property syndicate investments but the ombud process is not appropriate, due to the nature of these disputes”.

During the 2022-23 financial year, the office of the ombud received 10 970 new general consumer complaints about the sector. Some 59% of complaints fell within the mandate of the office, and 6 483 complaints were referred to its case management department for investigation. 

A total of 2 783 complaints were dismissed, 639 were referred for alternative dispute resolution mechanisms and 1 364 complaints were settled in favour of the complainant.

On average 84.04% of complaints were resolved within three months, 91.05% within six  months and 96.47% within nine months.

The office achieved 81.8% of its annual performance targets (18 of 22), with some of these targets missed by a fraction of a percentage and it also achieved a clean audit opinion for the 2022-23 financial period.

The post Financial ombud returns R39 million to consumers appeared first on The Mail & Guardian.