Stephen Cranston Writer & columnist

Voluntary ombudsman schemes have contributed a great deal to the fair resolution of complaints in financial services. The service providers who subscribe to each scheme agree to abide by the scheme’s decision, and the schemes cover areas that really matter to the consumer such as banking, life insurance and short-term insurance. This cheap form of litigation-free dispute resolution has proved itself, and has now been adopted by organisations such as the City of Joburg and the SA Military. There is none of the confrontation which can take place in the compulsory ombuds such as the Pension Fund Adjudicator (PFA). Because the private sector was never given the chance to opt in or opt out of this scheme it has no scruples about taking the PFA to court, as it did a decade ago. The counter-argument is that the voluntary schemes are cosy cartels. Perhaps if the ombudsman for long-term insurance had been tougher on charges in retirement annuities, the PFA would not have felt obliged to step...

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