Reana Steyn, Head Ombud and CEO of the National Financial Ombud Scheme South Africa (NFO)

Assisting consumers with their complaints and giving the right advice at the right time to rural and vulnerable people can significantly reduce the complaints arising from financial products and services in these communities.

Over time, it will also reduce the number of complaints from unhappy consumers, says Reana Steyn, Head Ombud and CEO of the National Financial Ombud Scheme South Africa (NFO) which came into being on 1 March 2024 through the merger of the Non-life and Life Insurance, Banking and Credit Ombuds.

Between 1 March 2024 and 31 December 2024, the NFO handled 35 855 complaints and recovered R328 550 212,58 on behalf of disgruntled consumers.

“it is significant that small towns and rural/farm areas accounted for 32,10% of all complaints,” said Steyn.

Appealing to financial service providers to take greater cognisance of the increasing disparity between financial consumers, Haroon Laher, Chairperson of the NFO, said they must be aware of the divide between rural and urban consumers and those that are sophisticated and vulnerable.

Laher said given the country’s rural and urban divide, and differences in the understanding of a financial product or service, “there are instances that point to information not being clear, thus causing confusion, and not being provided upfront”.

“The lessons learnt from the root causes of complaints can avoid repetitive grievances. The NPO will work towards ensuring inclusivity for financial services and products and, thereby, help to bridge the gap between the urban and rural, the sophisticated and vulnerable and disadvantaged,” Laher said.

Steyn said in the annual report of the NFO that complaints vary across provinces, reflecting regional disparities in financial concerns and consumers’ awareness of their free access to redress mechanisms.

Gauteng, as the economic hub, leads with 42,18%. The Western Cape follows at 19,14%, with KwaZulu-Natal at 14,07% and the Eastern Cape at 7,6%, showing the range of financial grievances across urban and rural settings. Smaller contributions from Mpumalanga, North West, Limpopo, and the Free State form part of the collective national picture, with the Northern Cape at 2,09%, reinforcing the importance of ensuring redress reaches even the smallest regions.

“This geographic diversity highlights the work that we still need to do to ensure that every consumer, regardless of location, has equal access to justice,” said Steyn.

Males accounted for 44,34% of all cases opened; females 55,55%, non-binary 0,03%, and 0,09% preferring not to disclose gender. The most complaints came from Blacks at 53,53%, Whites at 26,77%, Coloureds at 10,41% and Asians at 9,29%.

Highlighting the financial services woes of those who are vulnerable, it was reported that those who earned between R0 – R80 000 per annum were responsible for 49,63% of complaints. Complaints totalling 201 came from those between 65 and 75 years and 66 complaints were lodged by those between 75 and 85 years.

Steyn said: “At the core of the NFO lies a commitment to its values, one of which is to be accessible to all. Accessibility breaks down barriers, welcoming all who seek our assistance, especially vulnerable groups.”

Tracing the establishment of the NFO, she said in 2017 the National Treasury published a policy document that confronted the limitations of a fragmented landscape. Consumers struggled to navigate a maze of different ombud offices. The paper proposed a single, harmonised ombud scheme, especially for those consumers with limited financial literacy and away from urban area.

In 2021, the World Bank Group’s diagnostic report on South Africa’s financial ombud system called for greater coherence and stronger governance. Such an ombud scheme would not just resolve disputes, but also earn the public’s trust by being impartial, transparent, and truly consumer-centric.

In February 2024, when National Treasury released its policy position statement, it proposed a framework for amalgamating four Ombud institutions which had a long history of championing fairness.

“And so, the NFO was born – not just from legislation or regulation, but from shared purpose. The NFO did not simply merge organisations – it merged principles: a belief in accountability, in respect, in fairness, and in the right of every person to be heard.

“These values are not painted on our walls; they are the lens through which we interpret every case, every complaint, every question we must answer.

“As we look ahead, we remain mindful of the road still to be travelled. We must now earn the confidence of consumers and industry participants alike - not just through efficient processes, but through principled action,” said Steyn.

Laher added that in its first year, the NFO had discharged its mission to provide an efficient platform, driven by fairness and independence, within the free alternative dispute resolution regime in South Africa.

“A key attribute of the NFO is independence which must be visibly objective, impartial and unbiased. This speaks to not only independence from the financial industry but also from government,” he said.