The National Financial Ombud Scheme of South Africa (NFO) is an umbrella scheme formed by the amalgamation of four previously separate schemes: the Ombudsman for Banking Services, the Credit Ombud, the Ombudsman for Short-term Insurance and the Ombudsman for Long-term Insurance.
These bodies were established by the industries they represented and were based on the voluntary participation of member companies. They existed alongside statutory ombuds such as the Ombud for Financial Services Providers (better known as the FAIS Ombud) and the Pension Funds Adjudicator.
The NFO opened its doors on 1 March 2024, with divisions corresponding to the four schemes. It is registered as a non-profit organisation and recognised by the Ombud Council, a body constituted in 2017 to oversee financial-sector ombud schemes in South Africa.
The four schemes’ individual websites now direct you to the NFO webpage, where, if you have a complaint related to banking, insurance, or the credit industry, you must now file it. Your complaint will be channelled to the appropriate division. As was the case in the past, any complaint against a financial services company must initially be taken up with the company in question. It is only once this route has failed should you approach the NFO.
At the NFO’s launch last year, Reana Steyn, the Ombudsman for Banking Services who was later appointed the NFO’s Head Ombud, said: “The long history of assisting financial customers in their respective sectors 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.
“We believe that both the financial customers and the participants of 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.”
Note that all divisions of the NFO are funded by the member companies in the industries they represent. However, the NFO makes it clear on its website that “this in no way compromises our impartiality – our findings are based on probabilities, the onus of proof, applicable legal principles, and considerations of equity and fair play. The fact that all divisions of the NFO are funded by their participants enables each division to offer ombudsman services to consumers at no charge.”
The four divisions, which still operate relatively independently, are:
• Banking Division. This division helps to mediate and resolve disputes between consumers and banks and other financial institutions that are members of the Banking Association of South Africa. It deals with disputes about, among other things, internet banking, credit card fraud, home loans, ATMs, vehicle finance, credit bureau listing, debit orders, savings and cheque accounts, and fees and charges.
• Credit Division. This division deals with consumer complaints against credit providers. It has jurisdiction over participating credit providers, which include credit agents, credit bureaus, insurers, furniture and other retail stores, and non-bank credit providers. It also handles complaints relating to micro-financiers where these are members of MicroFinance SA. Areas covered include retail purchases on credit, personal loans, interest rates and finance charges, and credit bureau listings.
• Life Insurance Division. This division handles complaints brought by consumers and deceased estates in relation to long-term insurance policies. These include life insurance, funeral cover and health and investment policies, among others. Typically, complaints are about service levels, declined claims, policy lapses, non-disclosure, benefit amounts payable, the identity of beneficiaries and the mis-selling of policies.
• Non-life Insurance Division. This division handles complaints related to short-term insurance (more correctly known as non-life insurance), covering, among other things, household contents, commercial vehicles and properties, travel, hospital and medical expenses, and pets. Complaints may relate to customer service, settlements and claims, the administration of contracts, and services provided by an insurer’s authorised broker or agent.
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