Making a significant difference in the lives of South Africans

Reana Steyn, head ombud at the NFO

Reflecting on the establishment of the NFO on its first anniversary, Reana Steyn, NFO head ombud, says that the NFO has made a significant impact since its amalgamation one year ago. "We have had an important impact on the lives of thousands of South Africans by offering a vital safety net and recourse mechanism following any form of maladministration, disputes with the financial service providers or a significant financial loss. Few realise how important it is to have access to this kind of assistance until they become a victim of fraud, or suffer a loss," says Steyn.

Significant returns

The primary purpose of an ombud such as the NFO is to settle disputes between consumers and companies. This is particularly important within the South African financial sector as many consumers rely on the financial sector as a safety net to insure their most valuable assets, to purchase those assets, or to fund other living expenses through loans or store accounts. Life insurance, funeral cover and disability cover also play an extremely important role in protecting the livelihood of many. However, interactions between parties often turn into disputes, especially at claims stage or when the parties disagree over the amounts due, which is when the NFO steps in to make a real difference.

Since its inception on 1 March 2024, the NFO has dealt with 40,859 cases. During this period, the total amount claimed and refunded to consumers for the said period was R416,02m. This is a significant milestone in terms of recovering funds on behalf of consumers and is a testament to the NFO’s dedication to protecting consumer rights and its commitment to ensuring fairness and effective dispute resolution in the financial services industry," says Steyn, who adds that the financial services and insurance sectors play a vital role in the country.

Additionally, the NFO received and dealt with 125,741 emails as well as 25,162 WhatsApp calls and messages through its contact centre. This contact centre also received a total of 127,019 telephone calls in its first year.

The technology risk landscape

As we move into the second quarter of the year, many South Africans are facing financial challenges and confusion regarding their financial rights and obligations. This difficulty is heightened by the financial pressures that typically arise at the beginning of the year, often leading to over-indebtedness and complications linked to credit agreements. Thankfully, the NFO is here to assist consumers and is committed to promoting financial fairness, transparency, and justice in banking, credit, and insurance related matters. By providing free alternative dispute resolution, the NFO ensures that consumers are protected and empowered in their financial journeys, whilst also ensuring the financial institutions receive the same fair treatment.

She warns the public that the threat landscape within the banking and credit sector is growing as technology becomes more advanced and accessible. "The NFO is preparing itself for the increase in complaints it will face over the years as the public grapples with technology, constant new fraudulent schemes and irresponsible financial institutions. Increased complexity in the insurance cover and claims, ranging from household and vehicle insurance to life and disability cover, could similarly lead to an increase in complaints lodged with the NFO. While we urge the public to be increasingly cautious of the challenges and threats, they face on all fronts when it comes to financial services, they need to be aware of the important role that the NFO plays in offering key protection," says Steyn.

Focus on vulnerable consumers

When it comes to consumers, vulnerability includes many factors that impact decision making or financial management. Life events, which include significant personal hardships such as bereavement, unemployment, or sudden financial loss, could impact consumers of financial services. The NFO will continue to be alert to vulnerability on the part of consumers and in the appropriate situation, bring this to the attention of the financial institution whilst dealing with a complaint. Steyn also points out that scammers and fraudsters are increasingly using technology to impersonate representatives from financial institutions. They then urge and eventually convince vulnerable consumers to perform essential actions to their detriment.

“We urge the public to ensure they are informed about their rights and obligations in terms of their financial contracts, but if they believe that their situation caused them to fall into the vulnerable category, they must alert the NFO. They also need to be aware that the NFO deals with all complaints in a fair and equitable manner,” says Steyn.

Looking ahead

While the main objective of the NFO is to settle disputes arising within the financial services and life insurance and non-life insurance industry, Steyn is confident that the future is bright and that the NFO will play an increasingly important role in South Africa.

"The NFO was established in an environment where South Africans constantly face a complex and uncertain risk environment. It is important to note that the most vulnerable members of society are impacted the most when they face a financial loss. This is where the NFO makes the biggest difference. Additionally, the NFO will continue to champion the cause of consumer financial education and awareness of their rights and obligations in an effort to ensure better outcomes as they face this complex environment," says Steyn.

Reflecting on the year that was, Steyn points out that while the evidence points to the successful groundwork that has been put in place, the hard work continues to ensure that the NFO fulfils its goals to play a pivotal role in the country’s financial services landscape.

Consumers can contact the NFO through its website or its contact centre (0860 800 900).