Since its launch a year ago, the National Financial Ombud Scheme South Africa (NFO) has recovered R328.5 million for consumers who lodged complaints against financial institutions, the organisation announced in a statement on Friday.
The NFO is a single, one-stop, dispute resolution service made up of four former longstanding industry ombud schemes: the Ombudsman for Short-Term Insurance, the Ombudsman for Long-term Insurance; the Credit Ombud and Ombudsman for Banking Services. Services are provided free of charge.
Between March 1, 2024 and December 31, 2024, the NFO handled 35 855 complaints that had been dealt with by its four divisions, Non-life and Life Insurance, Banking and Credit.
Reana Steyn, the head Ombud and CEO of the NFO, said, “This recovery of monies has helped individuals and families regain lost financial stability, reinforcing the institution’s role as a guardian of justice in financial services.
Of the total amount of R328.5 million recovered on behalf of complainants, the Banking division of the NFO recovered R29.2m; Credit R2.4m; Life R202m; and Non-life R94m.
With an average turnaround time of 115 days for all complaints that came before the NFO, the banking division performed best, taking an average 52 days to close cases. The credit division took 79 days, life division 152 days and non-life 177 days to resolve complaints.
The Banking Division opened a total of 15 412 cases, of which 11 535 cases were successfully closed. Of the five banks with the highest number of cases opened, Capitec led with 1 203. This represented 20% of all cases opened, as can be expected for the bank with the highest number of customers by far. Findings in favour of complainants totalled 22%. FNB came in at a close second with 1017 cases opened, representing 17% of all cases opened, with findings in favour of complainants totalling 16%. Standard Bank had 998 cases opened, representing 17% of all cases and 19% of findings in favour of complainants. Nedbank had 881 cases opened, representing 15% of all cases and 22% of findings in favour of complainants. Absa had 812 cases opened, representing 14% of all cases and 13% of findings in favour of complainants.
The categories of complaints that kept the Banking Division most busy were current accounts, personal loans, savings accounts, credit cards, and home loan. Fraud remained the leading issue in consumer banking complaints, representing 30% of all cases. Complaints related to maladministration and debt-stressed consumers followed as the second and third highest categories, reflecting ongoing financial challenges faced by consumers.
The credit division of the NFO successfully closed 2 040 cases, achieving positive outcomes for complainants in 49% of cases. The Retail Credit Solutions (RCS) Group had the highest number of cases opened, totalling 243. This represented 17% of all cases opened. Findings in favour of complainants totalled 44%. OPCO 365 had 133 cases opened, representing 9% of all cases opened; Edcon had 126 cases opened, representing 9% of all cases opened; and DMC Debt Management had 121 cases opened, representing 9% of all cases opened.
During the reporting period, the non-life insurance division of the NFO closed 9 289 cases. Edite Teixeira-Mckinon, lead Ombud: non-life insurance division, said complaints related to motor vehicle insurance accounted for 42% of all the complaints finalised/resolved during the year. This was followed by homeowners’ insurance complaints at 27%, commercial complaints at 14%, household contents complaints at 6% and other types of insurance and nonclaim-related complaints, combined, at 11%. Santam had the highest number of formal complaints opened at 684, followed by Standard Insurance at 632, Old Mutual Insure at 613, Absa Insurance at 560 and Discovery Insure at 501.
The life division of the NFO finalised 5 977 cases in 2024 with funeral benefits remaining the product most complained about, accounting for 45% of complaints. Claims being declined were the most common cause for complaint at 56%, followed by complaints about poor service or administration at 34%. Of the five life insurance companies that received the most complaints, 628 formal cases were opened against Old Mutual Life Assurance, representing 18% of all complaints opened. Liberty had 399 formal cases opened representing 11%, Hollard Life Insurance had 259 cases representing 7%, Metropolitan Life had 216 cases representing 6%, and Sanlam Life Insurance had 188 cases opened representing 5%.
