Complaints handling and the role and procedures of the FAIS Ombud
Internal complaints first
An FSP must have an internal complaints process. A complaint should be acknowledged, investigated and responded to within the required timeframes. The FSP must keep records of the complaint, its investigation and the outcome. The process should be fair, transparent and accessible. If the complaint is resolved, the client should receive a clear written outcome; if not, the client should be informed of the right to refer the matter to the FAIS Ombud.
The FAIS Ombud
The FAIS Ombud provides independent dispute resolution for complaints about financial services within its jurisdiction. The Ombud is not a court and does not hear every dispute. Generally, the client must first give the FSP an opportunity to resolve the complaint. The Ombud may mediate, recommend or make a determination, subject to the Act and its monetary jurisdiction. Its process is intended to be free or low-cost for clients and less formal than litigation.
Traps
A common trap is saying the Ombud is the first port of call for every complaint. Internal resolution usually comes first. Another trap is assuming the Ombud has unlimited monetary jurisdiction or can award any amount. A third trap is treating an Ombud determination as a criminal conviction or as a court judgment. Also remember that the Ombud cannot resolve every type of dispute; jurisdiction must be checked.
Worked example
A client complains that a representative recommended an unsuitable product. The FSP investigates and responds but the client remains dissatisfied. The client may refer the complaint to the FAIS Ombud, providing the correspondence and records. The FSP should cooperate and keep its complaint file complete.
Rule of thumb: internal first, then Ombud; document timelines and outcomes.