“…In terms of the General Code of Conduct for Authorised Financial Services
Providers, a provider must have appropriate procedures and systems in place to record verbal and written communications relating to a financial service rendered to a client…”
And with this comment the FAIS Ombud ruled that a Johannesburg insurance broker should get an expensive reminder that short-cuts don’t work.
The issue centred around a claim repudiation, based on non-disclosure of previous losses, and the fact that the broker didn’t properly record the interaction between the client and the broker.
Charles Pillai, the Ombud for Financial Services Providers commented that the determination does not say that the fsp should have recording equipment on hand and operational. “It says that fsp’s should have systems in place to record communication. This is in accordance with various sections of the code referred to in the judgement.
"Whilst it is not for us to suggest that such equipment become part of the tools of trade of a practice, it is always useful, especially when there is a dispute of fact to have real evidence of what took place at the time. This could be in the form of a recording or some documentation such as e-mails, letters confirming the discussion etc., that would lead us to understand what took place."
The Ombud, in employing equitable justice, said while the respondent must accept that its failure to comply with the FAIS Act, in particular the General Code, had led to the Complainant’s loss, the Complainant also had to accept some responsibility for her actions.
The bakkie had been insured for R66 980. Complainant’s loss is the sum insured less any reasonable adjustments to be made to the claim as if the insurance had been properly put into place.
In splitting responsibility for the loss between the Complainant and Respondent, the Ombud ruled that it would be equitable that Complainant’s claim be upheld to the extent of 70% of her loss.