Goalposts keep moving for ombud

The office of the Financial Advisory and Intermediary Services (FAIS) ombud is encountering significant difficulties in finalising the backlog of property syndication complaints it has received.

It did not receive any new property syndication complaints in the year to end-March.

The backlog relates to complaints lodged years ago about schemes promoted and marketed by companies such as Sharemax and Highveld Syndication.

Assistant ombud Thobile Masina said one of the challenges relates to inconsistencies in the decisions of the Financial Services Tribunal, previously called the Financial Services Board (FSB) appeal board.

She said her office had previously taken one of the decisions of the tribunal on review in the high court, which ruled it was unable to assist because the tribunal was “part of your own entity”.

The court’s view was that this was something the ombud needed to resolve with the tribunal and the Financial Services Conduct Authority (FSCA).

One body, different decisions

The tribunal has taken different decisions and when dealing with complaints, the FAIS ombud does not know which decision a tribunal member will rely on.

“So the respondents rely on the decisions that favour them. We rely on the decisions that favour us. That is part of the reason why we can’t resolve those complaints informally,” she said.

Masina admitted the office is “between a rock and a hard place” and is getting legal advice on what steps it can take.

“What can we do, because we also cannot keep holding those [complaints] in abeyance? We also want to see them come to some conclusion,” she said.

The backlog of property syndication complaints was reduced to 1 147 at end-March this year, from about 2 000, shelved in 2013.

Masina said the office was drafting determinations to property syndication complaints, but has not issued them because of the recent decision by the tribunal.

The ombud’s annual report for the 2018-19 financial year reveals new complaints decreased by 8.7% to 9 323 from the 10 211 in the previous year.

The office resolved 9 954 complaints in the year, 6.8% more than the number of complaints received during the financial year.