Case Studies Illuminate Financial Justice Lessons

5 June 2026

The case studies in the Annual Report of the National Financial Ombud Scheme (NFO) serve as more than a record of disputes resolved. They offer a window into the kinds of matters that regularly come before the office.

Each case study illustrates not only how the NFO applies principles of fairness and accountability but also highlights recurring patterns of consumer vulnerability and institutional shortcomings. A sampling of case studies follows:

Insurer’s Silence Turns Storm Claim Into Four-Month Ordeal

A matter that came before the Non-life Insurance Division of the NFO highlights a simple truth: insurers must invest more in claims administration if they are to deliver fair treatment and timely service.

The complaint arose after storm damage to the roof of outbuildings on 27 November 2024. The claimant lodged her claim on 3 December 2024, and a service provider appointed by the insurer assessed the property on 9 December. Yet by mid-January 2025, she had heard nothing. Only after querying did the insurer confirm it had received the service provider’s report but was awaiting further input. Silence followed until March 2025, when the claimant escalated the matter which then came before the NFO.

A second desktop assessment was eventually done on 28 March 2025, using photographs taken back in December 2024. The claim was rejected – four months after submission. The insurer admitted delays due to problems with the first service provider but offered no apology.

The NFO’s provisional recommendation noted that from December 2024 to April 2025, the claimant received no constructive feedback. For three months, she was left in the dark while the insurer failed to explain the delays. This amounted to maladministration and a breach of fair treatment standards. Had the matter been resolved in January, the claimant could have repaired the damage sooner.

A compensation award of R3 000 was recommended, to which the claimant was agreeable. The insurer however resisted, arguing the “material inconvenience threshold” had not been met and again refused to apologise. The Escalation Committee of the Non-life Insurance Division disagreed, finding maladministration and contravention of Policyholder Protection Rule 17, which requires insurers to keep claimants informed of progress, delays, and decisions.

During the delay, the claimant refrained from repairs to avoid prejudicing the insurer’s validation process, leaving the property exposed to further rain damage and causing distress. Ultimately, the insurer agreed to pay. The complaint was resolved without a formal ruling, but the case stands as a reminder: silence and delay are not service and fairness.

Bank Repossesses Without Court Order

The NFO’s Banking and Credit Division resolved a complaint involving the repossession and sale of a motor vehicle by a bank without a court order or valid voluntary surrender documentation.

The complainant’s vehicle was taken while in the possession of her employed driver. She disputed that the vehicle had been voluntarily surrendered and maintained that no court order had been obtained authorising the repossession. The bank was unable to provide evidence of a court order or a signed voluntary surrender form, despite having already proceeded to sell the vehicle.

The NFO found that although the account was in arrears and the bank was entitled to enforce the credit agreement, it was required to do so through proper legal process. In the absence of a court order or valid surrender, the repossession and subsequent sale of the vehicle were deemed procedurally improper.

Given the bank’s failure to follow due process, the NFO recommended that the outstanding shortfall on the account be written off. The bank accepted the recommendation, resulting in the complainant’s debt being fully extinguished.

The case reinforces the principle that credit providers must adhere strictly to lawful enforcement procedures when repossessing secured assets, even where customers are in default.

NFO Rules No Duty to Disclose the Unknown

A medical doctor lodged a disability claim in 2023 under his Discovery Life policy. The insurer raised a defence of material non-disclosure, alleging he had failed to reveal long-standing foot pronation treated with orthotics and a 2017 diagnosis of plantar fasciitis. Discovery characterised these as “chronic pain” requiring “constant pain management”.

In a provisional ruling, the Ombud found the defence unjustified, holding that the insurer had not discharged its burden of proof. Discovery appealed, arguing that as a medical doctor the complainant had particular knowledge of his symptoms and their potential consequences, which later manifested in disability. The insurer claimed this amplified the risk and underscored the duty of disclosure.

The Ombud rejected this reasoning. An applicant cannot disclose information unknown or unforeseeable at the time of application. The insurer’s reliance on later developments was misplaced, and its description of orthotics as “chronic pain management” was deemed exaggerated and unfair. The questions posed at application stage – such as whether the applicant had fibromyalgia or chronic pain disorders – would not reasonably have prompted disclosure of foot pronation.

After careful consideration, the Ombud issued a final ruling: Discovery had failed to prove material non-disclosure and could not reconstruct the policy. The insurer abided by the ruling and, assessing the claim under the original cover, duly paid the benefit.

Ends

Contact details for the NFO:

Telephone: 0860-800-900