In a significant move aimed at preserving integrity within the financial sector, a former employee of Clientèle Life insurance has been debarred for dishonestly promoting a funeral policy as a loan to a client.
Themba Mathebula, who served as a representative at the insurance firm from November 2022, allegedly was involved in unethical sales practices that resulted in a drastic loss of trust in the financial advisory landscape.
According to the company, Mathebula was dishonest when he knowingly proceeded to capture and activate a funeral policy without a client's approval.
The company provided a summary of the call transcript between Mathebula and the client which occurred in September 2024.
During the call, it was confirmed that the client had applied for a loan on Clientèle's Super Compare’ website but received a call offering another product. However, Mathebula proceeded to inform the client that she has been selected to be assisted with money up to R100,000.
When the client asked him: How long will it take to pay it? 3 years, 4 years, 5 years?, he responded: '‘As long as you are covered with us, as long as it is active, and it does not lapse.’'
However, he failed to clarify to the client that the call concerned a funeral policy and not her application for a loan.
The company said his handling of the call was rushed, with critical information about the nature of the offer obscured, and he focused on the monetary aspects of the deal.
In addition, it was said he read the script rushing, and the closing statement was done rushed.
"If the script is rushed, the client is not adequately apprised of the policy and the respondent is not entitled to debit the client’s account for that policy. The applicant disregarded his duty in this regard," said the insurer.
Due to unethical selling, and illegitimate deductions from her account, she requested that the policy be cancelled.
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Following the cancellation, Mathebula was informed about the impending debarment hearing scheduled for October 2024.
There was no response, and the hearing proceeded in his absence, and he was subsequently debarred after the chairperson found that he acted dishonestly and no longer met the requirements of the Financial Advisory and Intermediary Services Act.
Discontent with the decision, Mathebula sought remedy through the Financial Service Tribunal (FST), asserting he had no prior knowledge of the hearing. He contended that his employer failed to inform him correctly, given the update on his contact details
He claimed that he was mugged, and his phone was stolen in September 2024.
As a result, he got a new phone number which he provided to his manager. He said if his employer's intention was for him to attend the debarment hearing, they should have contacted him on his new cell phone number.
He denied defrauding the client and maintained that he followed the product script.
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However, his employer produced evidence that Mathebula was issued with a final written warning in March 2024 after he had allegedly committed the same act.
In response to the written warning, it was said he promised that he will "do the right thing next time and always follow the script and ensure that the client is aware all the time of what is being offered".
To cement their case, the company included two emails addressed to Mathebula where in August and September 2024 where he was in breach after allegedly failing to follow the script and was advised on how to rectify his errors.
Looking at the evidence, the FST said Mathebula was made aware on previous occasions that when a customer has applied for a loan online, they are called for a funeral policy, it must be made clear to that customer that what is on offer is not a loan but the funeral policy.
"Despite acknowledging his error and an undertaking to do the right thing, the applicant (Mathebula) failed in his duty to convey factually correct information to a customer where based on the customer’s queries and responses during the telephone call and the applicant’s manner of communication, he ought to have established or reasonably assumed the customer’s level of knowledge concerning the financial service on offer in light of her apparent confusion," read the judgment.
Furthermore, it was added that even after the customer’s confusion demonstrated by her question regarding the term of repayment and when she seemed surprised that she was being asked to nominate a beneficiary, Mathebula failed to clear the confusion by adequately and appropriately conveying to the customer that there is no term for repayment as it is a funeral policy which he is offering and not a loan.
"The applicant was made aware on previous occasions that when a customer who has applied for a loan online is called for a funeral policy, it must be made clear to that customer that what is on offer is not a loan but the funeral policy," said the FST.
The FST said the facts support Clientèle's finding that Mathebula lacked honesty in rendering financial services.
"In the premises, the tribunal can find no basis to interfere with the respondent's decision to debar the applicant."
His application for reconsideration was dismissed.