The National Financial Ombud Scheme South Africa (NFO) has placed R328.5 million back into the pockets of aggrieved consumers in its first year of operation as a unified ombud scheme.
The National Financial Ombud Scheme South Africa (NFO) has placed R328.5 million back into the pockets of aggrieved consumers in its first year of operation as a unified ombud scheme.
This was according to the NFO’s inaugural annual report, released on Friday, which detailed 35 855 consumer complaints processed between 1 March and 31 December 2024 across the scheme’s four divisions: banking, credit, non-life insurance and life insurance.
“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,” head ombud and NFO CEO Reana Steyn said.
“The NFO has continued to solidify its role as a pillar in the South African landscape that ensures access to financial consumers to transparent and effective resolution of disputes.”
The banking division was the top performer in terms of speed of resolving complaints, with an average case turnaround time of 52 days. It recovered R29.1 million, closing 11 535 of the 15 412 complaints it received.
The life division finalised 5 977 cases, recovering the bulk of funds for the period, totalling R202.8 million, for consumers. Funeral benefit disputes dominated the caseload, accounting for 45% of all complaints, followed by poor service or administration (34%).
Lead ombud for the division Denise Gabriels said the most common complaints related to claims being denied (56%) followed by complaints about poor service or administration (34%).
Top insurers by complaint volume included Old Mutual (628), Liberty (399), Hollard (259), Metropolitan (216) and Sanlam (188). The division had the longest average case resolution time at 152 days.
Banking division head Nerosha Maseti said, despite significant structural changes within the ombud scheme, the division had managed to maintain consistency and a commitment to fair outcomes.
Capitec drew the most complaints (1 203), accounting for 20% of all banking complaints, in line with its position as the bank with the largest customer base. FNB followed with 1 017 cases (17%), then Standard Bank (998), Nedbank (881) and Absa (812).
Findings in favour of complainants ranged between 13% and 22%, with Capitec and Nedbank both recording the highest consumer success rates at 22%.
Fraud continued to top the list of complaint categories, accounting for 30% of all banking cases. Other leading issues included maladministration and complaints from debt-stressed consumers. The most disputed products included current accounts, personal loans, savings accounts, credit cards and home loans.
The credit division handled 2 040 cases, achieving positive outcomes for consumers in 49% of them. The division recovered approximately R2.4 million, with the Retail Credit Solutions Group topping the list of institutions by complaint volume at 243 cases (17%).
OPCO 365, Edcon Limited and DMC Debt Management were also high on the list, each with more than 120 cases opened.
Credit division ombud lead, Howard Gabriels, said his office’s investigations uncovered systemic issues during the year.
“A serious concern emerged regarding the application of payments on credit accounts where VAS [value-added service] charges, such as airtime or insurance add-ons, were not considered in determining the minimum monthly payments,” Gabriels said.
“This led to growing balances despite customers paying what they believed to be the full amount due. Following our intervention, the affected credit provider agreed to write off inappropriate balances and amend its internal policy to ensure VAS charges are included in future minimum payment calculations.”
According to his office, this finding highlights the importance of oversight in an environment where vulnerable consumers often find themselves subjected to obscure or poorly explained charges that can deepen indebtedness.
The non-life insurance division closed 9 289 cases and recovered R94.1 million for consumers.
Head of the division, Edite Teixeira-McKinnon, said the majority of complaints stemmed from motor vehicle insurance claims (42%).
“The primary reason for complaints under this motor category of insurance was claims rejected on an exclusion in the policy, the leading exclusion being the failure to prevent or minimise loss or damage, also known as a lack of due care or recklessness,” Teixeira-McKinnon said.
Homeowners’ insurance disputes accounted for 27% of complaints with the most common incidents being damage incurred during natural disasters (40%). Other top concerns were burst water apparatus (16%) and theft/burglary (8%).
Rejections due to gradual deterioration, lack of maintenance and disputes over the quantum of claims were common.
The insurers with the most formal complaints lodged were Santam Limited (684), Standard Insurance Limited (632), Old Mutual Insure (613), Absa Insurance (560) and Discovery Insure (501).
NFO Board chairperson Haroon Laher said the organisation was committed to consumer protection in the face of powerful financial players.
“Bravery in anything we do does not merely mean facing the loudest, or sometimes the most powerful, voices. It requires those involved to listen to the quietest whispers of those who have been wronged,” Laher said.
“It is this very courage, carried out through acts of bravery, that will define the NFO in what it does and achieves.”
Four legacy ombud schemes, including the Ombud for Banking Services, the Credit Ombud, the Short-Term Insurance Ombud and the Long-Term Insurance Ombud, were combined into a single centralised platform in 2024.
The services of the ombud are offered free of charge to consumers who can file complaints via its website here once they have exhausted the internal complaints channels of financial service providers without obtaining a satisfactory resolution.