From CompliNEWS | Financial Service Intelligence Watch
Bongani Progress Masela v Momentum Insure Company Ltd (debarment set aside by the FST)
Financial Services Tribunal (‘FST’ or ‘Tribunal’)
The following matter was handed down by the Financial Services Tribunal on 30 July 2024:
• Bongani Progress Masela (Applicant) and Momentum Insure Company Ltd (Respondent) – (case number: FSP11/2024)
Summary
Background
The respondent, an FSP, first dismissed and then debarred the applicant as a financial services representative in terms of s 14(1) of the FAIS Act, on the grounds that he ‘no longer meets the requirements of honesty and integrity as envisaged by the FAIS Act’. The respondent alleged that the applicant:
- was negligent in not including car hire in a client’s policy, which resulted in the respondent having to pay for car hire when the client’s car was written off and thus delaying the finalisation of the claim;
- accepted money from the client to extend the car hire;
- did not follow due process when the client requested an extension of the car hire and referred her to an unauthorised person instead.
In doing so, he had exposed the client to financial harm and the respondent to serious reputational damage.
The applicant applies for the reconsideration of his debarment in terms of s 230 of the FSR Act. He contends that the monies he received from the client related to errand he had run for her and not to the extension of the car hire and that therefore he had not breached the respondent’s policy.
The issue
Whether the applicant had breached the respondents code of ethics and policy.
Facts of the matter
The client instituted a claim for her car that had been written off. It was found that her policy did not include car hire and the respondent had to provide her with a courtesy rental car for 30 days, which delayed the settling of the claim and meant that the client had to extend the car hire beyond the 30 days. The client alleged that when she contacted the applicant about the need to extend the car hire, he offered to refer her to someone who could help her for a fee (‘sugar money’) of R1 200, which she paid to the applicant in cash. The client presented a number of WhatsApp messages as evidence. On the basis of the messages the respondent first dismissed and then debarred the applicant.
The applicant denies the client’s version of events and also alleges that he was not given the opportunity to challenge the allegations.
Findings
The FST considered:
- The Tribunal examined the WhatsApp correspondence between the applicant and the client.
The FST held:
The Tribunal found that the correspondence does not mention what the R1 200 payment was for, and that the references to the client putting in petrol, buying food for the applicant, and the fact that the client does not deny the applicant’s references to driving her around, supports the applicant’s version that he had run errands for the client, and that the correspondence contained no admission by the applicant that he owed the client money – it was an unknown person who was to repay the client.
Conclusion and Order
The Tribunal concluded that the WhatsApp messages do not support the allegations that the applicant took money from the client in exchange for assisting her with the extension, thereby breaching the respondent’s policies. The debarment was set aside.
The law
- Financial Advisory and Intermediary Services Act 37 of 2002 – s 14
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Financial Sector Regulation Act 9 of 2017 – s 230.