OMBUD COUNCIL ANNUAL REPORT 2024/25

PART B: PERFORMANCE INFORMATION

2.4.1 NATIONAL FINANCIAL OMBUD (NFO)

BANKING DIVISION: As reported in previous years by the former Ombud for Banking Services, fraud remained the most prevalent complaint category, accounting for 30% of all banking complaints. This was followed by maladministration complaints and complaints from debt-constrained customers. The trends highlight persistent consumer vulnerabilities. The majority of complaints in the Banking Division relate to current accounts and personal loan or savings accounts, and of these the majority related to fraud, with a notable increase in digital banking fraud matters. In such cases, the NFO considers mitigating factors, such as whether the bank could have reasonably prevented certain transactions or acted timeously to recover funds. Although not emerging from complaints data as an actual statistical trend, the Ombud Council has engaged the NFO on whether there is cause for concern regarding a few specific complaints reported to the Ombud Council and the media indicating apparent unfair conduct or maladministration in relation to home loans, including practices around sales of property in execution. CREDIT DIVISION: Two outcomes of systemic significance related to the treatment of value-added services (VAS) in credit account payment calculations; and improper credit bureau listings. In the VAS cases, customers were misled into thinking they had met their minimum monthly repayment obligations; however, VAS charges (such as airtime and insurance) were not included in the calculation of the minimum monthly instalment due, resulting in the balances outstanding continuing to increase despite regular payment. Following engagements with the NFO, credit providers agreed to write off affected balances and committed to revising internal policies to include VAS charges in future minimum payment calculations. The highest volume of complaints received in this division relate to store cards and credit card accounts. For store card/ store accounts, prescription-related issues, fraud, and contractual disputes are the most common complaints. Complaints related to credit information also made up one of the largest complaint categories, with inaccuracies and outdated data, followed by prescription and payment profile issues being the leading causes.

The NFO is an industry ombud scheme that was recognised by the Ombud Council with effect from 1 March 2024 through the amalgamation of four previously recognised industry ombud schemes: The Credit Ombud; the Ombud for Banking Services; the Ombud for Long- term Insurance; and the Ombud for Short-Term Insurance. During the period reported on, the NFO comprised four divisions, each representing the sectors served by the previous schemes. Statistics of the NFO reflect that there is a consistent demand for accessible, fair dispute resolution within the financial sector as may be evidenced from the case volumes. R328 million was recovered for financial customers across the four divisions. The majority of recoveries came from the Life Insurance Division, which accounted for over R202 million, followed by the Non-Life Insurance Division at R94 million, Banking at R29 million, and Credit at R2.3 million. Cases opened per product indicate that motor vehicle insurance, homeowners’ insurance, current accounts, and funeral insurance issues generate the most complaints. The NFO assisted 287 vulnerable consumers who faced challenges when attempting to resolve complaints. Most were older adults over 65 years old. Some had been experiencing difficult life events like losing a spouse, divorce, or job loss. In addition, financial customers had challenges with language barriers, mental or physical disabilities or not understanding financial issues. Complaints are also reported per the Treating Customers Fairly (TCF) outcomes across six categories: appropriate advice; claims, switching and complaint processes; fairness and culture; information and disclosure; product and service design; and product performance and service quality. The highest concentration of complaints related to the latter three categories. This highlights persistent challenges in service delivery, transparency and the alignment of financial products with consumer needs.

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OMBUD COUNCIL ANNUAL REPORT 2024/25