The power of the ombudsman
This week the ombudsman for long-term insurance forced PPS Insurance to pay out cover to a dentist. This is just one of the many rulings from various ombudsmen bodies and it demonstrates that the concept of an ombudsman does work.
An ombudsman is set up by a particular industry as a self-regulatory measure and it is proving far more effective than most government authorities.
For example, if you met the ombudsman for banking services, Clive Pillay, you would be surprised to discover that banks are prepared to pay his salary. He passionately believes in the rights of the consumer.
The PPS Insurance case is worth mentioning because it is a reminder of the importance of checks and balances in the financial services industry. PPS had ruled that a partially blind dentist with a severe coronary condition was fit to work part time and, as such, it would compensate him only 20% of his benefits.
The basis of the ruling was that he could still practise and was involved with a project for African healthcare and that this proved he was still able to work.
Physiotherapists found that the dentist in question could not work for more than three hours a day before exhaustion set in because of to his heart condition.
The ombudsman found that the project in which the dentist was involved was not a profession or a money-making activity but an altruistic act.
Therefore PPS was ordered to pay him 60% of his benefits. Without an ombudsman this would have been a legal nightmare for the client who would have incurred huge legal fees and spent much time fighting a large insurer. But because PPS is a registered body under the ombudsman, it complied with the ruling.
Often consumers are unaware of the ombudsman option. Recently a reader contacted me about a serious issue he had with the RCI Holiday Club. He was hoping that as a journalist I could intervene. I referred him to the relevant ombudsman and he is happy that his case is being taken seriously.
The ombudsman will not always rule in the customer’s favour as there are sometimes legitimate issues that the customer may have misunderstood. But as a rule, ombudsmen are effective.
So, if you are having a problem with a financial services company, give its ombudsman a call—you may be pleasantly surprised.