On Tuesday, 28 October 2024, the Office of the FAIS Ombud hosted a virtual launch of its Annual Report for the 2024/2025 financial year. The event, held via webinar, featured the Ombud sharing key insights into the Office’s performance for the reporting period.
In his foreword, the Ombud, Advocate John Simpson, emphasized the ongoing progress being made by the Office of the FAIS Ombud in providing consumers and the financial industry with “…the services they expect and deserve”. The Ombud reiterated that “The numerous workflow and case management processes implemented in the previous years have continued to help process and close cases more quickly and efficiently.” And at that, “The ‘premature complaints process’ was introduced in 2023 and continues to result in Providers settling clear and valid claims very quickly, without requiring a protracted investigation.”
The Ombud also highlighted the amendments made by the Ombud Council to the Rules of the FAIS Ombud “The Ombud Council published the new Rules for the Office on 28 June 2024. The most significant changes were the increased claim jurisdiction from R800 000 to R3 500 000, and the Office no longer accepts complaints against unregistered financial services providers. The increased claim jurisdiction did not result in any significant increase in complaints. The Office received large claims in the past and dealt with many of them. The increased jurisdiction made it unnecessary for the Financial Services Providers (Providers) to consent to the increased claim or for the consumer to abandon the portion of the claim exceeding the limit. No entity or person may provide financial services without being registered, and monitoring unregistered providers falls within the regulatory sphere, not the FAIS Ombud. This rule change also encourages consumers to only transact with registered service providers and not to respond to investment scams and false information on social media.”
The progress being made by Financial Services providers in respect of their internal complaint procedures was reported: “It also noted a significant decrease in the number of complaints it received against the large Providers. With the guidance provided by the Office, the large Providers are settling more complaints without needing them to be reported to the Office. We commend the Providers for this excellent progress.”
The Office received 3,382 complaints within its jurisdiction and closed 3,543 complaints for the year (complaints closed include active cases carried over from the previous financial year). In 41% of the complaints closed (including premature complaints), an award was made, or a settlement was reached, and R31.7 m in compensation was awarded to the consumers. Formal cases (Inclusive of Premature Complaints) were closed within an average of 59 working days.
The Office achieved 86.96% of its Annual Performance Targets (20 of 23), an improvement on the previous year. Two invoices out of 818 were paid outside the 30-day period, resulting in a missed target. Two employment equity targets were not achieved due to staff resignations, affecting the ratios at the time. The Office met or exceeded all its core mandate targets on case administration and resolution.
For the third successive year, the Office has achieved a clean audit finding, which it is very proud of.
In the interests of clarity and continued alignment with the National Financial Ombud Scheme (NFO), some descriptions of the statistics reported were amended to reflect the NFO description. Where applicable, the statistics are presented to enable meaningful comparison with the NFO.
The Office of the FAIS Ombud received 15,404 new complaints. This is higher than the 10,574 complaints opened for the corresponding period during the previous financial year and represents a 45.68% increase in the number of complaints received compared to the preceding financial year. 22% of these complaints fell within this Office’s mandate. This resulted in 3,382 complaints being referred to the premature complaints process or the Case Management Department for investigation.
Overall, the total number of formal complaints closed, which included those carried over from previous financial years, was 3,543. The number of complaints settled was 1,453. This resulted in a settlement ratio of 41% compared to 35% in the 2023/24 financial year. (The 41% comprises 24.70% of formal complaints, and 63.10% of premature complaints found in favour of the complainant). The overall settlement value for the financial year was R31 748 435.
On average, the total number of complaints closed or referred for the year, 15,448 (including enquiries, premature complaints, and formal complaints), was closed within 17.27 working days. In respect of formal complaints, the average number of working days to closure was 73.42.
Complaints are only dismissed after significant due diligence has been undertaken during the investigation, and the Ombud Office must provide detailed reasons for any decision made. The Office could not find any basis for an award in favour of the complainant in 2,058 cases. Any party that feels aggrieved by any decision taken by the Office can approach the Financial Services Tribunal for the matter to be reconsidered. During the 2024/25 financial year, 79 applications for reconsideration were made to the Financial Services Tribunal.
Of the 79 Tribunal applications filed as of 31 March 2025, 70 of those applications for leave were dismissed, with only four (4) referred back to this Office for reconsideration. This reflects a favourable agreement rate (94.59%) by the Tribunal. The Tribunal’s rulings reflect the Office’s commitment to diligently investigating complaints per its mandate to issue independent and impartial decisions.
A total of 10,177 complaints were referred to other ombud schemes, which was higher than the 5,087 referred during the previous financial year. This referral process ensures that complainants are guided to the correct forum to receive the assistance required. All this is part of our continued commitment to service and enhancing access to justice for all South Africans.
The Ombud thanked the Ombud Council, the governance committees and stakeholders for their ongoing guidance and support, and the FAIS Ombud staff for their invaluable dedication to the Office’s success.