The newly-formed National Financial Ombud Scheme (NFO) today announced the commencement of operations as a single, one-stop, all-in-one dispute resolution service made up of the four (4) former existing services – the Ombudsman for Banking Services (OBS); the Credit Ombud (CO); the Ombudsman for Long-Term Insurance (OLTI); and the Ombudsman for Short-Term Insurance (OSTI).
The Ombud Council, granted the NFO recognition (under section 194 of the Financial Sector Regulation Act, 9 of 2017 (FSR Act), as an industry ombud scheme on 23 February 2024.
Complaints will be accepted from 1 March 2024. All the services and assistance previously provided to individuals and companies by the previous Ombud schemes, will now be available through the newly established NFO, at no cost to consumers.
The amalgamation to form the NFO is expected to leverage the success of their predecessors while providing a streamlined, co-ordinated, and less confusing alternate dispute resolution framework for financial customers.
“The long history of assisting financial customers in their respective sectors to obtain redress for unfair treatment by financial institutions, free of charge and with minimal formality, is a hallmark of the ombud service, consumers have come to expect and value,” says Reana Steyn Ombudsman for Banking Services.
“We believe that both the financial customers and the participants of the scheme will benefit significantly as a result of the new single-entry point process, with the same rules applicable to all types of complaints.” “In addition, it will be easier to create awareness and educate consumers about the existence and mandate of the single scheme, as opposed to trying to explain the function of four separate schemes
“Other benefits of the new scheme include improved efficiencies at the administrative level and a harnessing of the institutional knowledge, expertise and staff experience of the previous schemes, built up over more than 20 years. Each of the predecessor schemes will operate as a division of the NFO.”
The granting of recognition includes the Ombud Council’s approval of the governing rules of the NFO. Section 214 of the FSR Act provides that, before granting recognition to an industry ombud scheme, the Ombud Council must carry out ‘a public consultation on the scheme’s proposed governing rules’.
Consultation began in November 2023 and a comprehensive process was undertaken in order to consider the comments received. Several changes to the scheme’s governing documents were affected as a result.
“The NFO acknowledges the time and contributions made by the numerous participants and stakeholders. As can be expected, the new Rules deviate to varying degrees from those of the four predecessor schemes and we expect an adjustment period, as both the scheme and the participants get used to the new dispensation. The Rules of the NFO Scheme setting out the details of the Scheme’s jurisdiction, functions and operations will be available on the on the NFO’s new website.”
