Voluntary vs Statutory Ombud Schemes

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Voluntary vs Statutory Ombud Schemes

• Presented by Manie van Schalkwyk

2
Agenda

• Background
• Voluntary VS Statutory Schemes
• Across the Divide
• The Divide
• Hybrid Systems
• Working Together
• Conclusion

3
Background

• CIO Voluntary Scheme established in 2004
• Mandate Resolve disputes between Credit
  Bureaux/Credit Providers (Banks, Insurance
  Companies, Retailers, Mobile/Telecom companies
  and Microlenders) and Consumers/Businesses in
  terms of Credit Information when listed unfairly
  or incorrectly on Credit Bureaux.
• In SA 4 Voluntary Schemes CIO, Banking, Short
  Term Insurance and Long Term Insurance
• 2 Statutory Schemes Insurance Advice (Brokers)
  and Pension Funds

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Voluntary VS Statutory

• Situations where two parties are opposed to each
  other in some way, for example at a sporting
  event. One party is said to be versus another.
  Versus in this context is synonymous with
  "against".
• Entering the era of coordination and working
  together
• Focus on the commonalty

5
Across the Divide

• Promote confidence in the industry
• Unhappy consumers who could not resolve dispute
  with industry
• Both investigate complaints with regard to good
  industry practice, what is fair and reasonable
• Expectation from complainants to resolve
  complaints timeously
• Expectation from both to provide good service,
  consistency, fairness and efficiency

6
Across the Divide

• Accountable to stakeholders- Must have good
  administrative practices and decision making
  processes and have arrangements in place to
  safeguard its independence
• In SA all rulings are binding on Industry
• Office of last resort
• We need to add value and make a difference

7
The Divide

• Voluntary Schemes
• Non legalistic
• Buy-in from stakeholders
• Easy to change and adapt
• Criticism Not independent
• Statutory Schemes
• More legalistic
• Legislation is forced on stakeholders
• Any changes take time
• Criticism Bureaucracy

8
The Divide

• Does this make on Scheme better than the other ?
• Place for Both
• Small number of players with similar businesses
  or interest Easier to establish a Voluntary
  Scheme
• Large number of players with diverse interests or
  businesses Easier to establish a Statutory
  Scheme

9
Hybrid System

• Across the divide - Hybrid System
• Voluntary Schemes with Statutory Recognition
• In SA Financial Services Ombud Scheme Act
  FSOS
• All Financial Ombud Schemes to apply for
  accreditation

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Hybrid System

• Objective of Act
• Minimum requirements for Ombud Schemes
• Promote Consumer Education
• Coordination of Ombud Activities
• Promote best practice for complaint resolution
• Ensure independence of all schemes
• Another way to create Hybrid system is for
  legislation to force Industry member to be part
  of a Ombud Scheme i.e. Credit Ombud

11
Working Together

• We all understand the necessity and importance of
  proper governance, processes and procedures and
  administrative systems So why debate this
  Focus on the practical challenges that exists
• Challenges exist for both systems
• Identify common areas of challenges
• Derive a plan to overcome these challenges

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Working Together

• All Ombud Schemes want to create awareness of
  existence with consumers
• All Ombud Schemes want consumers to understand
  their rights and responsibilities
• All Ombud Schemes want footprint and easy access
  for consumers
• All Ombud Schemes want to eliminate any confusion
  with consumers in terms of which Ombud Scheme has
  jurisdiction

13
Working Together

• Confusion with Consumers ito jurisdiction
• Create one entry point for all financial consumer
  complaints
• Establish a call centre to serve as switchboard
  and direct the call to relevant Ombud Scheme or
  Regulator
• Consumer lack of awareness and difficult access
• Establish offices with Government to serve as
  centralised complaints office for all financial
  complaints. Complaints referred to call centre
  who in turn refer to relevant Ombud Scheme or
  Regulator

14
Working Together

• Consumer Education
• Share resources to promote Ombud offices and
  provide consumers with education about their
  rights and responsibilities
• Make consumer aware of compliant mechanisms which
  include Ombud Schemes

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Conclusion

• Recognize the different offices for the purpose
  that it fulfill Voluntary/Statutory or Hybrid
• Identify areas to add value and make a difference
• Coordinate efforts and work together as Ombud
  Industry