The Tribunal can now also hold the decision-maker in the FAIS ombud’s office accountable for not attending to complaints timeously and expeditiously. Picture: 123RF/AUDTAKORN SUTARMJAM
The Tribunal can now also hold the decision-maker in the FAIS ombud’s office accountable for not attending to complaints timeously and expeditiously. Picture: 123RF/AUDTAKORN SUTARMJAM

You can no longer ask the Ombud for Financial Services to reconsider a complaint if your complaint has been dismissed, or, if you failed to receive a favourable ruling from him after complaining to him about a financial services provider.

As from the beginning of April 2018, the body that was in place to reconsider decisions of the FAIS ombud, the appeal board of the Financial Services Board, has been replaced by the Financial Services Tribunal.

Previously, if your complaint was dismissed you could approach the ombud’s office to reconsider its decision backed with additional reasons and evidence to substantiate your request. A senior person at the ombud’s office would then either have confirmed the dismissal of your complaint or reopened your case.

But, according to Naresh Tulsie, the FAIS ombud, when the Financial Sector Regulation Act was introduced in 2018, any request for the reconsideration of a case has to be directed to the Tribunal and the application must follow a prescribed process.

On the upside for consumers, the Tribunal is no longer restricted to simply dismissing your application for reconsideration or setting the Ombud’s decision aside and referring it back for further consideration.

The definition of a “decision” which can be reconsidered can now also include the omission of the Ombud to make a decision within a prescribed period, or within a reasonable period.

Tulsie says the decision-maker can  therefore be held accountable by the tribunal for not attending to complaints to this office timeously and expeditiously. Decisions of the FAIS ombud, the Pension Funds Adjudicator and the Financial Sector Conduct Authority itself fall under the Financial Sector Regulation Act.

Furthermore, the tribunal has the power to impose an administrative penalty on any party to the proceedings and even, in exceptional circumstances, make a cost order against a party to the proceedings.

Importantly, the Financial Sector Regulation Act gives you the right to receive reasons for a decision by the decision-maker that is reached about your complaint and the right to have a decision reconsidered by means of an application to the tribunal.

If you want to challenge the decision of the FAIS ombud, you have to follow a specific process which includes:

  • Drafting your application for reconsideration in a specific format
  • Once the tribunal has received your application for reconsideration, the ombud’s office must submit the underlying documents and provide further reasons for his decision, where necessary.
  • Any person that has a direct and substantial interest in the decision upon which the reconsideration application is based, may apply to the tribunal to be joined as a party to the proceedings.
  • If you will be arguing your case before the tribunal you will have to stick to the new stricter rules, which give either party a maximum of two hours each to present their arguments.

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A practical problem that has arisen due to a misalignment of the current FAIS legislation with new legislation introduced in 2018, involves the process to appeal against a determination issued by the ombud.

Under the Financial Advisory and Intermediary Services (FAIS) Act, you need to ask for leave to appeal against any of the ombud’s determinations before the tribunal can be approached for an application for reconsideration.

This section relating to leave to appeal has inadvertently not been amended and remains in force.  As such you would still need to ask for leave from the ombud before you can approach the tribunal.  This results in a duplication of applications.   

Tulsie says as an interim measure and until such time the FAIS Act is amended, the ombud will grant you the necessary leave to appeal when a determination is issued. This should streamline the process and assist in a fair administrative process to you, the consumer, he says.

It is worth noting that in the majority of the decisions referred to the tribunal for reconsideration so far, the tribunal has agreed with the decisions made by the FAIS ombud’s office and has dismissed said applications. The tribunal has upheld 130 of the 140 applications that have been dismissed by the FAIS ombud since April 2018.

The members of the tribunal are appointed by the finance minister and must, by law, include at least two people who are either retired judges or who have suitable expertise and experience in law. At least two of the members must have experience or knowledge about financial products, financial services, financial instruments, market infrastructure or the financial system.