New ombud scheme will handle complaints about insurance, banking and credit

The newly formed National Financial Ombud Scheme will now start to handle complaints about long-term and short-term insurance as well as baking and credit.

The single, one-stop, all-in-one dispute resolution service is made up of the four former existing services, the Ombudsman for Banking Services, the Credit Ombud, the Ombudsman for Long-Term Insurance and the Ombudsman for Short-Term Insurance.

The Ombud Council granted the National Financial Ombud Scheme (NFO) recognition under the Financial Sector Regulation Act, as an industry ombud scheme on 23 February and complaints will now be accepted.

The amalgamation to form the NFO is expected to build on the success of its predecessors while providing a streamlined, co-ordinated and less confusing alternate dispute resolution framework for financial customers.

“The long history of assisting financial customers to obtain redress for unfair treatment by financial institutions, free of charge and with minimal formality, is a hallmark of the ombud service that consumers have come to expect and value,” says Reana Steyn, Ombudsman for Banking Services.

“We believe that both the financial customers and the participants in the scheme will benefit significantly as a result of the new single-entry point process, with the same rules applicable to all types of complaints.”

In addition, it will be easier to create awareness and educate consumers about the existence and mandate of the single scheme, as opposed to trying to explain the function of four separate schemes, Steyn adds.

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Benefits of the new NFO

“Other benefits of the new scheme include improved efficiencies at the administrative level and a harnessing of the institutional knowledge, expertise and staff experience of the previous schemes, built up over more than 20 years. Each of the predecessor schemes will operate as a division of the NFO.”

The granting of recognition includes that the Ombud Council approved the governing rules of the NFO in line with section 214 of the Act that provides that the Ombud Council must carry out ‘a public consultation on the scheme’s proposed governing rules’ before granting recognition to an industry ombud scheme.

Consultation began in November 2023 and a comprehensive process was undertaken to consider the comments received. Several changes to the scheme’s governing documents were affected as a result.

“The NFO acknowledges the time and contributions made by the numerous participants and stakeholders. As can be expected, the new rules deviate to varying degrees from those of the four predecessor schemes and we expect an adjustment period, as both the scheme and the participants get used to the new dispensation.”

The Rules of the NFO Scheme setting out the details of the scheme’s jurisdiction, functions and operations will be available on the on the NFO’s new website at www.nfosa.co.za.