The Ombud for Financial Services Providers has published new rules. (Blanchi Costela/Getty Images)
The Ombud for Financial Services Providers has published new rules with effect from 1 July, with the main change being a significant increase in the jurisdictional compensation limit for consumers who become victims of financial harm.
The rules replace an existing framework from 2004 with the maximum competition award for financial prejudice or damage being increased to R3.5 million from R800 000. The impact of inflation since the previous rules from 2004 mean complaints involving retirement advice, particularly post-retirement transactions involving annuities, can often exceed the prior jurisdictional limit.
This risked undermining the ombud system, which aims to provide access to free, independent and effective dispute resolution, with some complainants instead simply opting to pursue expensive litigation instead.
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