National Financial Ombud Scheme recovers R416m for consumers

9 Mar 2025

The National Financial Ombud Scheme marked its first anniversary last week, having dealt with 40,859 cases over the past year.

The National Financial Ombud Scheme (NFO) is the result of a merger of four ombudsman agencies: the Ombudsman for Banking Services, Credit Ombud, Ombudsman for Long-Term Insurance, and Ombudsman for Short-Term Insurance, to provide a single platform for resolving complaints and disputes in South Africa’s financial services sector.

The scheme handled a staggering 125,741 emails, 25,162 WhatsApp calls and messages and 127,019 telephone calls, highlighting the significant demand for the NFO’s services.

‘Safety net’

Reana Steyn, NFO head ombud, said that the organisation had made a significant impact on thousands of South Africans by providing a “vital safety net” and recourse mechanism for those affected by maladministration, disputes or financial loss.

However, Steyn also warned that the financial sector’s growing reliance on technology had created new challenges, with scammers and fraudsters increasingly using digital means to impersonate financial institutions.

“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 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,” she said.

The NFO has received thousands of complaints related to banking, credit and insurance services. While the scheme has made progress in resolving these disputes, concerns remain about the complexity of financial products and the vulnerability of certain consumers.

But what’s driving this trend? For starters, according to forecasts by PwC South Africa, the country’s unemployment rate is projected to rise from 32.7% in 2024 to 33.2% in 2025. This, combined with the economic growth of only 0.6% in the fourth quarter of 2024, hits hard for the consumer.

Read more: SA GDP grows by 0.6% in Q4 2024 as agricultural sector rebounds with 17.1% surge

As the NFO looks to the future, it will need to balance the needs of consumers with the interests of financial institutions. With the financial sector continuing to evolve, the scheme’s ability to adapt and respond to emerging challenges will be crucial.

Pre-merger

Looking back at 2023 – before being incorporated into the NFO – the Ombudsman for Long-Term Insurance (OLTI) and the Ombudsman for Short-Term Insurance (OSTI) jointly recovered more than R386-million for complainants during the 2023 financial year. OLTI recovered R283-million in lump sums, averaging R1.14-million per working day, and an additional R727,838 was awarded in 169 cases as compensation for poor service.

Meanwhile, OSTI recovered R102.6-million for consumers, after receiving 13,750 written requests for assistance, with 6,714 chargeable complaints within its jurisdiction.

If you have a complaint that falls in the financial services sector, you are expected to first try to resolve the dispute with the financial services provider. However, if you are still unhappy with the outcome, you can contact the NFO through its website or its contact centre (0860 800 900). DM

Categories:

Tags:

DM is much better if you are signed in...

Business Maverick

‘Safety net’

Pre-merger