Unit Standard No.12164Page 70
WHAT MEASURES ARE AVAILABLE FOR CONSUMER PROTECTION PURPOSES, AS CONTAINED IN THE LEGISLATION?
Clients who receive inappropriate advice could either approach the Ombud or institute civil proceedings based on delictual liability (i.e. a person suing another person, as opposed to the State suing a person), or breach of contract.
Further, the Act makes provision that:
“No provision of this Act and no act performed under or in terms of any such provision, may be construed as affecting any right of a client, or other affected person, to seek appropriate legal redress in terms of common law or any other statutory law, and whether relating to civil or criminal matters, in respect of the rendering of any financial service by an authorised financial services provider, or representative of such provider, or any act of a person who is not an authorised financial services provider or a representative of such a provider.”
This means that the FAIS Act does not prevent a client who has been aggrieved by an FSP or a representative from seeking legal redress in terms of any other law.
The General Code of Conduct makes it clear that clients are to be given “reasonable and appropriate general explanations of the nature and material terms of the relevant contract or transaction.” There are many other provisions contained in the General Code of Conduct which are primarily around consumer protection.
If Consumer Education is seen as a proactive consumer protection measure, then there is further provision in the legislation as can be seen from section 32 below.
It could be argued that client education is client protection since a more educated client makes more educated decisions.
Promotion of client education by registrar
32. The registrar may take any steps conducive to client education and the promotion
of awareness of the nature and availability of the Ombud and other enforcement
measures established by or in terms of this Act, including arrangements with the Ombud, representative bodies of the financial services industry, client and consumer bodies, or product suppliers and authorised financial services providers and their representatives to assist in the disclosure of information to the general public on matters dealt with in this Act.
INSMAT final materials31/10/03