SA Home Loans denied leave to appeal ruling
May 5, 2007

By Neesa Moodley

The Financial Advisory Intermediary Services (FAIS) Ombud, Charles Pillai, this week turned down SA Home Loans' application for leave to appeal against a ruling made by him late last year in which he slammed the company for offering "shoddy service and minimal advice".

Pillai says the case highlights how appeals, the consideration of appeals, and final rulings serve only to delay the handling of complaints by the FAIS Ombud's office.

In the case in question, the complainant, Saroja Naidoo, had to continue with bond payments for over a year while waiting for a final ruling.

Pillai ruled that SA Home Loans would have to pay out a credit life claim to Naidoo and refund all the bond payments she made after the death of her husband, Subramoney Naidoo, in October 2005, until settlement of her claim.

The Naidoos took out a mortgage bond with SA Home Loans and, on April 26, 2005, were sold a bond protection plan by an SA Home Loans consultant over the phone. The bond protection plan covered husband and wife, with Naidoo's husband as the principal insured party. But SA Home Loans rejected the claim when he died in October 2005.

When Pillai turned down its application to appeal this week, he said the company did not appear to appreciate the focus of his original ruling, which was clearly on "the manner in which financial services were rendered to the complainant and her deceased husband".

In terms of the FAIS Act, the onus was on the company to explain clearly to both Naidoos the terms and exclusion clauses of the contract. Pillai said SA Home Loans had failed to do this. He added that the high monthly commission of 21.75 percent charged was "totally out of proportion to the service rendered".

This article is published on http://persfin.co.za