The Office of the Ombud for Financial Services Providers (“FAIS Ombud”) has issued a determination in favour of Mr Christo Nel, after his insurer rejected a claim for his stolen vehicle due to a second tracking device not being installed.
Mr Nel’s complaint was lodged on 23 October 2023 after his insurer repudiated his claim following the theft of his Toyota Fortuner on 2 July 2023. The rejection was based on a policy condition that required certain high-risk vehicles to be fitted with a second tracking device, effective 1 April 2023.
Mr Nel argued that he was not made aware of this new requirement and maintained that, until receiving the repudiation notice, he had only ever been informed that a factory-fitted alarm, immobiliser, and a CIB-approved tracking device were required, conditions with which he had complied.
His advisor, Barton Insurance Brokers (Pty) Ltd (FSP 5254), claimed it had emailed policyholders about the new requirement on 1 March 2023 and provided a copy of the message sent to Mr Nel’s wife’s email address. However, Mr Nel had been the sole policyholder since July 2020 and had consistently communicated with Barton through his own email addresses. He denied ever receiving any such notification.
Barton acknowledged that it used the wife’s email address recorded in its system and that no follow-up call was made to confirm receipt of the communication, an additional step that had been intended for all affected clients. Barton submitted that Mr Nel’s was the only case where the follow-up process had failed.
The General Code of Conduct for Authorised Financial Services Providers and Representatives (“the Code”) contains the following provisions that apply to this matter:
- General duty of provider.
— A provider must at all times render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients and the integrity of the financial services industry. - A provider must —
(a) in making contact arrangements, and in all communications and dealings with a client, act honourably, professionally and with due regard to the convenience of the client; and…”By failing to review and update Mr Nel’s contact information, Barton did not adhere to reasonable standards and the provisions of the Code.
The Ombud upheld the complaint and ordered the Respondent to pay Mr Nel R681,250.00 as the sum insured for the vehicle, plus interest at a rate of 11.25% per annum from the date of the determination to the date of final payment.Following the determination, the Respondent paid the full amount owed to the Complainant.This determination is a reminder to all financial services providers of their obligation to communicate policy changes to their clients in a timely, clear, and correct manner, particularly where the change is material and could lead to a claim being declined.
Consumers are also encouraged to contact their insurance advisors to confirm whether they comply with all the insurer’s requirements.
Access the full determination here…
Should you believe that you have been financially prejudiced because of the financial service rendered to you with respect to a regulated financial product, please lodge a written complaint directly with the service provider. If the complaint remains unresolved after six weeks, you can visit our Complaints Portal at www.faisombud.co.za and select ‘Lodge Complaint’. Alternatively, you may submit a complaint in writing to info@faisombud.co.za. You can also call our Client Care Centre at (012) 762 5000 or Sharecall at 086 066 3274 for assistance in submitting a complaint.
