The Ombud Council is pleased to announce that it has granted recognition to the following five financial sector industry ombud schemes in terms of section 194 of the Financial Sector Regulation Act, 2017 (FSR Act) with effect from 1 May 2022.
• Credit Ombud (Download Certificate of Recognition)
• Ombudsman for Banking Services (Download Certificate of Recognition)
• Ombudsman for Long-Term Insurance (Download Certificate of Recognition)
• Ombudsman for Short-Term Insurance (Download Certificate of Recognition)
• Johannesburg Stock Exchange Ombud Scheme. (Download Certificate of Recognition)
Ombud schemes serve a crucial consumer protection function, providing financial customers with access to affordable, effective, independent, and fair alternative dispute resolution processes for complaints about financial institutions and their products and services. The Ombud Council, established by the FSR Act, has a mandate to oversee financial ombud schemes and assist in ensuring that this functions is fulfilled.
The above schemes have been operating successfully for some years. Following the repeal and replacement of the law under which they operated, a more comprehensive regulatory framework for their continued operation was formulated under the FSR Act. Formal recognition of the industry schemes completes this transition and is the first formal step the Ombud Council has taken in delivering its statutory mandate. Recognition of the industry schemes provides financial customers with the assurance
that the governing rules of the schemes meet prescribed standards and that they operate under the independent oversight of the Ombud Council. Recognition also provides legal certainty for the schemes by confirming their status and the obligations that financial institutions have in relation to membership of the schemes.
The Ombud Council is working together with the National Treasury and relevant financial regulators, with guidance from the World Bank, on further wide-ranging reform of the financial ombud system. Formal recognition of the existing industry schemes lays a foundation upon to which to build planned future enhancements.
The five ombud schemes submitted comprehensive applications for recognition in February 2022, followed by a detailed vetting process by the Ombud Council, including an invitation for public comment on the schemes’ governing rules. The process culminated in recognition being granted with effect from 1 May 2022. Please refer to the Ombud Council’s website at ombudcouncil.org.za for contact details of the schemes, and further information on the role of the schemes and the Ombud Council.
Notes to editors:
• The Ombud Council is established in terms of section 175(1) of the FSR Act. The objective of the Ombud Council is to assist in ensuring that financial customers have access to, and are able to use affordable, effective, independent and fair alternative dispute resolution processes for complaints about financial institutions in relation to financial products, financial services and services provided by financial infrastructures.
• The Ombud Council has oversight powers over both the statutory and industry financial sector ombuds. It will recognise industry schemes, set enhanced governance and accountability requirements, and harmonise and strengthen standards of practice for each ombud scheme through rulemaking and enforcement powers, to develop a uniform and consistent framework for external dispute resolution mechanisms across the financial services sector.