By Eva Smith (Attorney) @ Lucid Living
2010 will see the Financial Service Industry up their game in the way they deal with consumers with the coming into effect of the Consumer Protection Act (CPA) later this year.
The Financial Services Board, which regulates the financial service industry, is currently in the process of finalising a draft document which details an entirely new approach in South Africa, to regulate the financial industry called “Treating Customers Fairly”
Treating Customers Fairly is a concept similar to that devised in Britain to regulate financial product providers and will further emphasize those provisions laid down in the CPA.
Jonathan Dixon, the FSB’s deputy executive, stated that “the intention of Treating Customers Fairly is to put in a proactive regulatory system rather than one that reacts to problems when they occur.” He further states that “the current rules based system of protecting consumers has seen scoundrels trying to find loopholes to exploit consumers”.
HOW WILL Treating Customers Fairly BENEFIT YOU
- Treating Customers Fairly aims to ensure that you, the customers, are treated fairly throughout the financial industry from product development to handling of complaints to ensure that you are not exploited at any stage. You can therefore be confident that you are dealing with firms where fair and equal treatment is of paramount importance.
- Products and services marketed and sold in the retail market must be designed to meet the needs of specific consumer groups and are targeted accordingly.
- You will be provided with clear information and will be kept appropriately informed before, during and after sales. Therefore advice you must receive will include payment of upfront commission, incentives, details of cost and increases must be emphasized to you.
- A provider must also communicate information to you in a way that is clear, fair and not misleading.
- Where you receive advice, the advice must be suitable and takes account of your circumstances.
- If you are provided with products, you can reasonable expect them to perform as the provider’s have led you to expect, and any associated service is both of an acceptable standard and as the providers have led you to expect.
- A provider must also, once you have acquired the product, ensure that his / her level of service is acceptable (i.e. no undue delays) and not different from that actually offered.
- You should not face unreasonable barriers imposed by a provider to change products, switch providers, submit a claim or make a complaint. You should be able to change products or switch providers without incurring excessive penalties.
- You should have no unreasonable barriers when claiming or laying a complaint against your provider.
Overall Treating Customers Fairly seeks to further enforce uniform protection in the financial service industry in dealing with consumers. Treating Customers Fairly, once finalised will enforce uniform rules in line with the CPA, into one document to rule all of the financial service industry.