Background:

1.) The complaint concerned the surrender of the late Policyholder’s investment policy in November 2025, approximately 15 months before its maturity date of 1 February 2027. The Complainant alleged that her late Mother (the Policyholder) attended the Respondent’s branch to enquire about her policy and benefits but was not informed that she was signing surrender documents or of the financial consequences of surrender.

2.) The Respondent maintained that the surrender was properly authorised and provided signed surrender documentation and a quotation. The Complainant subsequently provided a queue ticket recording the purpose of the branch visit as “Enquiry & Information” and an affidavit from the late Policyholder’s grandson stating that she believed she was signing documents for an enquiry, not surrendering the policy.

Assessment of Evidence:

3.) The Office considered whether the branch interaction constituted financial advice or an intermediary service under the definition in section 1 of the FAIS Act. Although the employee who attended to the late Policyholder was not a financial adviser, the conduct potentially constituted an intermediary service because it involved facilitating a transaction concerning an existing financial product. The issue was therefore whether that service had been improperly rendered.

4.) The additional evidence was considered together with the Respondent’s documentation. The grandson’s affidavit materially corroborated the Complainant’s version and was presented as relevant evidence concerning the late Policyholder’s understanding at the branch. However, it was post facto evidence and did not record the actual discussion between the late Policyholder and the Respondent’s Representative.

5.) The evidence therefore presented competing factual versions. The Respondent relied on the signed surrender documentation, which contained declarations that the late Policyholder had considered the surrender options and understood their implications. Resolving the conflict would require determining what was explained to her, what she understood, and whether the documents accurately reflected her intention. This would require credibility findings and the calling and cross-examination of witnesses.

6.) The dispute also raised issues concerning the policy’s paid-up status, premium payments, the surrender proceeds and the underlying loan. The latter matters, insofar as they concern the administration and calculation of the credit agreement, fall outside the jurisdiction of this Office.

7.) This Office determined that resolving the material dispute concerning the branch interaction would require credibility findings, the calling of witnesses and potentially cross-examination. Such an evidentiary enquiry was considered more appropriate for a court or other dispute-resolution forum than the Ombud’s informal, economical and expeditious process.

Outcome:

8.) In terms of Section 27(3)(c) of the Financial Advisory and Intermediary Services Act No. 37 of 2002 (‘FAIS Act’), this Office determined that there were reasonable grounds for the complaint to be dealt with by a court or another appropriate dispute-resolution process.

9.) Furthermore, Section 20(3) of the FAIS Act requires the Ombud’s process to be procedurally fair, informal, economical and expeditious. In this matter, resolving the material factual dispute would require a detailed evidentiary enquiry, including witness testimony and cross-examination, which is not suitable for the Ombud’s process.

10.) The complaint was therefore declined in terms of section 27(3)(c). This was not a finding that the Respondent’s version was correct, nor that the grandson’s evidence was untrue. Rather, the Ombud could not fairly resolve the competing factual versions within its process.

11.) The matter illustrates the importance for FSPs of maintaining clear contemporaneous records of material client interactions and for consumers to obtain and retain documentation reflecting significant transactions concerning financial products.