The National Financial Ombud ("NFO") is a new and potentially effective way of resolving disputes between financial service providers and consumers. Companies must be aware and prepared to deal with consumer complaints using the new NFO Rules to adjudicate such complaints. The NFO combines four separate South African Ombud Schemes under one umbrella Financial Services Ombud scheme. It has jurisdiction over Banks, Credit Providers, Short-Term Insurers (Non-Life Insurance), and Long-Term Insurers (Life Insurance).

The intention is to ensure fair and just outcomes for consumers and financial service providers. Among the notable provisions are:

  • Opportunity for making Representation: Parties involved in a complaint have a limited time to present their case before the NFO proceeds with making a determination.
  • Obligation to Report Contraventions: The NFO is mandated to report significant breaches of rules or failures to cooperate by a Financial Service Provider (Participants) to relevant authorities.
  • Complainant's Rights: Empowering complainants, the rules allow them the option to pursue litigation or alternative forums if they disagree with NFO rulings or recommendations.
  • Confidentiality: Upholding the confidentiality of complaint proceedings, information obtained during the process is privileged and may only be disclosed with the consent of all the parties or by order of the court.
  • NFO Confidentiality Obligations: The NFO, along with its personnel, is bound by strict confidentiality obligations, ensuring the privacy and security of complaint-related information.
  • Sharing Information: Facilitating regulatory oversight and compliance, the NFO may share complaint information with relevant regulators or insolvency practitioners as needed.
  • Reporting Obligations: As part of its commitment to transparency, the NFO is obliged to publish an annual report within six months of each financial year, providing insights into its activities and outcomes.

It is important to note that two statutory schemes, the Ombud for Financial Services Providers (better known as the FAIS Ombud) and the Pension Funds Adjudicator, remain separate.

The full set of rules can be accessed here. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.