Weekend Argus (Saturday Edition)
FAIS Ombud ‘a beacon of hope for consumers’
After 15 years at the Office of the Ombud for Financial Services Providers and assuming the position of ombud in 2010, Noluntu Bam has stepped down. In this message, she looks back at some of the initial challenges faced by the office and its growth to become a player to be reckoned with in the financial services landscape.
IN 2003, I started work as an assistant ombud at this remarkable institution known as the Office of the Ombud for Financial Services Providers
(or FAIS Ombud). Fifteen years later, as I bid this office farewell, I cannot help reflecting on the few challenges and many successes that were encountered along what has been a stimulating journey.
When I joined the tribunal, it was a little-known entity under the stewardship of the first FAIS Ombud, the late Charles Pillai, and it had only five members of staff. As the office gained muscle in the form of human capital, it slowly cleared away the dead wood and focused on developing and refining its processes to ensure better customer service, galvanised governance and increased complaints resolution.
Now a familiar name that resonates with many South Africans, the Office of the FAIS Ombud has earned its stripes as a beacon of hope for those who require access to justice to resolve their complaints against powerful financial houses.
At the beginning of my journey with the FAIS Ombud, I had reasoned, rather fallaciously, that my previous exposure to the financial services industry and my impending qualification as a Certified Financial Planner would comfortably see me through the resolution of complaints. How mistaken I was.
My experience in the financial services industry gave me an advantage, no doubt, and, so too, did my understanding of financial planning law. However, the work of a financial regulator demanded a lot more than legal technical prowess. We had to run a business, a highly regulated one at that. Also, I could not have foreseen what was coming by way of complaints, the volume thereof, and the pain of dealing with abusive providers that looked past the human being, straight to the money.
FIRST STEPS
In early 2004, we decided to resolve complaints long before we were empowered to do so by law, in order to start introducing the office, its mandate and the then ombud to the financial services industry. Our first knock at each door would be that of an enquiry. We wanted to know whether businesses would accept us as mediators, because, at the time, we had no legal status to resolve complaints. The Financial Advisory and Intermediary Services (FAIS) Act and its subordinate legislation had not come into operation in full. Once inside, we would raise the legal issues presented in the complaint and leave it to the entity to decide how it would resolve the matter. That initial thinking saw us resolve our first complaint and a few more.
Originally from the Eastern Cape and having briefly settled in KwaZulu-Natal in pursuit of personal development, I was new to Gauteng, which can be intimidating to villagers and those who come from small towns. Luckily, I had a guide in the person of Charles Pillai.
One-and-a-half decades later, as I clear my desk and get ready to move onto the next chapter of my life, I reflect upon what will count as one of my greatest shots at contributing towards the growth of Mother Africa, through this institution of hope known as the Office of the FAIS Ombud.
It feels surreal that I will no longer be part of the “FAIS Ombudsies” and exchange late-night emails in pursuit of the FAIS Ombud’s goals. I am leaving behind a team of highly qualified and competent people; a people-centric team that prizes organisational success as if it were their own; a crowd that is cognisant that failure of the organisation means their own failure. I am jealous.
We recognised from the onset that we could never do things on our own. Over the years, we have benefited immensely from the help of several public entities, standard-setting bodies such as the Financial Planning Institute, academics, retired judges, intermediaries – both active and retired – and industry administration staff. This help has always been a breath of fresh air, and it enables us to move forward with confidence. We run a business, after all.
The mandate of the FAIS Ombud is to resolve complaints. The legislature saw fit to bring the FAIS Act into being to protect consumers and foster the integrity of the financial services industry.
The power imbalance between the contracting parties in financial arrangements means it is not only the poor who need legislative protection; it is everyone. When dealing with financial products, consumers are faced with prolix, dense and hard-to-read contracts. There is little or no room to negotiate the terms. One cannot negotiate what one does not understand anyway.
Consumers rely on the intermediary’s understanding of the product – which, at times, can be disappointingly inadequate – and trust that the financial product recommended to them will suit their needs.
When consumers receive a letter of rejection, denying what they thought would be provided in terms of the contract, they require an accessible and independent forum to hear their complaints.
TRUST IN THE OFFICE
Over the years, South African consumers have put their faith in the Office of the FAIS Ombud. It does not matter to them that they do not have to present themselves physically at the office; they come anyway. Young and old, rich and poor, literate and illiterate, they all come.
I will never forget the complaint from a 68-year-old retiree who had travelled overseas with his wife, comfortable in the belief that his medical expenses would be covered while abroad. He developed deep vein thrombosis while flying to his destination. To his shock, the insurer advised that he had to return to South Africa to lodge the complaint, which he eventually did. Once in South Africa, he was informed that the policy did not cover anyone beyond the age of 65, and so his claim was rejected. We put forward a simple case: “Was it fair to recommend the policy to the 68-year-old given the outright exclusion?” The case was resolved, and the consumer was satisfied.
Consider the case of Mrs Helena Dennis and how she successfully challenged a bank – rightfully so – and provided insurance to protect the bank’s interests as the mortgage lender; insurance that accorded with her circumstances, not the one the bank was recommending. As much as Mrs Dennis was tenacious and undeterred by the lack of an audience to deal with her case, she would not have resolved the matter on her own. She required the Office of the FAIS Ombud to set the record straight, and it did.
What about Mr Nelson Tshitema, who believed he was dealing with a bank because the calls came from a branch where he banked? After agreeing to transfer his savings from the bank account to the investment recommended by two gentlemen at the bank, he discovered that the two were pursuing their own interests but using the bank’s resources. Mr Tshitema had to demonstrate that he had been misled by the bank’s employees, but the bank would not assist him. The FAIS Ombud stepped in with a determination and resolved the matter.
Can we forget Mrs Kawula and the plethora of insurance policies she was sold and which she viewed as a transaction to purchase furniture? Notwithstanding contestation from several quarters that the ombud had overstepped its boundaries in deciding in her favour, the decision was never successfully challenged.
A lady from KwaZulu-Natal whose complaint was resolved after years of complaining to the provider to no avail sent R300 in an envelope to a case manager, thanking her. It was deposited back into her bank account on the same day. She wrote back and thanked us for acting as her lawyers. We wrote back in appreciation, but gently informed her that we are an independent complaints-resolution body.
A complainant whose complaint had been dismissed by the office made the following comment: “We, like most people who are in their twilight years, entrusted our finances with [X] bank, a reputable institution. When these institutions take advantage and behave like they have done in our case, our only hope is watchdogs like the FAIS Ombud, whom we know is obliged by law to consider the facts and apply the law without fear or favour.”
The fact is that the FAIS Ombud has changed the way the game is played.
COMMITMENT
The work of the office and its success is a reflection of the drive and commitment of our people. The results achieved over the years speak to that commitment and dedication. There is no particular time by which staff must leave the office. Staff, of their own volition, push on late into the night. It has become routine for senior staff to connect to their laptops after-hours in pursuit of the FAIS Ombud’s organisational goals.
As a result of the extent of personal involvement, commitment and ownership of what we do, it is important for us to choose staff wisely.
We have not always got it right. As in any recruitment exercise, the potential to select misfits is always present. What reduces the pain, however, is the ownership and expeditious remedying of the problem by the responsible senior personnel who are directly connected to the matter at hand.
The work of the FAIS Ombud requires more than technical prowess and confidence in one’s abilities. There is what is often referred to as responding to a calling. Our people must demonstrate the values of public service, embrace the FAIS Ombud’s brand, have patience and understanding, and be willing to go the extra mile.
We are not perfect, and we have never sought to find perfection in any one of our employees. We bring our own experiences to work, but we try as much as we can to bring our best selves to the office every day.
Without the conscientious staff of the FAIS Ombud, there would be no FAIS Ombud. I am indebted to the senior managers and executives at the FAIS Ombud. I am leaving behind an office that is supported by competent stewards with an impeccable work ethic.
I will always be indebted to several leaders of the FAIS Ombud – in particular, the risk team and the senior managers. These people picked me up and fuelled my tank when it ran dry, and they encouraged me to go forward. They nurtured me spiritually and empowered me to give my best, while observing the rules of common decency and giving me my space. They can attest to my hunger and passion for justice for the common person
I am also indebted to my principals, the board, who, over the years, have guided me in steering the office, while maintaining a healthy distance between the operation and their oversight role. Several people within and outside the office held my hand and cautioned me to slow down when my pace might not have accommodated an approaching hairpin bend. They are too many to mention by name, but they know who they are.
Finally, I am indebted to the South African public for their trust in the office. This trust is demonstrated, first, in the ever-increasing number of complaints we receive year after year. Second, they are never hesitant to write to me about their disenchantment with how the office has treated them.
A Mr Nero wrote to me and poured his heart out in disgust at the service he had received. The matter was resolved, not because Mr Nero obtained the relief he sought, but because we owned up to our mistakes and did right by him.
I stress that, in their pursuit of justice, it does not matter to consumers that the outcome might not favour them. They trust us with their stories with the comfort that we will not undermine the seriousness of their pain, and that we will apply the law when resolving their complaints.
Adieu.