FAIS Ombud on short-term bank deposit complaints
The Office of the FAIS Ombud has published a media release on its mandate with regards to short-term deposit complaints. As a result of the implementation of the Financial Sector Regulation Act 9 of 2017, with effect from 1 April this year, the Financial Services Conduct Authority (FSCA) is now more than ever dedicated to regulating market conduct across all financial institutions in South Africa. This includes the market conduct of banks in South Africa, which as a result will be directly regulated for the first time.
In this regard, National Treasury and the FSCA have published for public comment a diagnostic study prepared by the World Bank aimed at ensuring fairer retail bank practices in South Africa, titled 'South Africa Retail Banking Diagnostic: Treating Customers Fairly in relation to Transactional Accounts and Fixed Deposits.'
In truth, the Office of the FAIS Ombud has always had a mandate to investigate complaints with regards to the financial service rendered in respect of transactional and short-term bank deposits. Not only is 'deposit' included in the definition of a financial product in terms of the FAIS Act, but during 2004 a specific Code of Conduct for Authorised Financial Services Providers and Representatives conducting Short-Term Deposit Business (the Code), was published under Board Notice 102. This Code mandates the FAIS Ombud to deal with complaints in respect of providers rendering financial services in respect of deposits as defined in the FAIS Act, with a term not exceeding 12 months. The Code provides in Part II a number of general duties providers are obliged to adhere to, which include the unsolicited contacting of clients, where providers must act honourably, professionally and with due regard to the convenience of the client. The purpose of the contact must be explained.
In keeping with its requirements of the Code, providers must also act honestly and fairly, with due skill, care and diligence, in the interests of clients and the integrity of the financial services industry. The Code makes provision for a complaints handling process that providers must abide to. However, consumers who are experiencing concerns with regard to the manner in which they were advised of, or how the financial service was rendered in terms of their transactional accounts or short-term deposits and where these concerns have not been adequately addressed by the provider, can contact the office of the FAIS Ombud to lodge a formal complaint.