- Investigators discovered that the cellphone number used for policy approvals belonged to the advisor's sister.
- The client initially complained that policy deductions had been made without his knowledge or consent.
- The Tribunal found the advisor acted dishonestly and upheld her debarment.
What seemed like a straightforward funeral policy enrolment began to unravel when investigators decided to call the cellphone number used to authorise it. Instead of reaching the client whose policy had been issued and later amended, the call went to the sister of the financial advisor who had handled the transactions.
This discovery became the turning point in a case that ended with the Financial Services Tribunal dismissing Precious Mbalie Ndlangamandla’s application for reconsideration and confirming Momentum Metropolitan Life Limited’s decision to ban her from working in financial services.
A complaint sparks questions
The dispute centred on a funeral policy issued in May 2024 in the name of Sikhumbuzo Mathenjwa. Momentum said that Ndlangamandla enrolled on the policy with a monthly premium of R168 and later processed two premium increases, first to R254 and then to R329. On each occasion, electronic USSD consent was received using the same cellphone number.
The matter came to light in October 2024 when Mathenjwa complained that premiums were being deducted from his salary without his knowledge or authorisation. He asked for the policy to be cancelled, a refund, and action against the advisor who had handled the transaction. The insurer refunded the client and began a forensic investigation into the complaint.
Investigators then contacted the cellphone number used to authorise the policy and the premium increases. The person who answered confirmed the number was hers and that she was Ndlangamandla’s sister. According to the investigation, the call ended abruptly when she was asked if she knew the client.
The investigation ultimately concluded that the advisor had acted dishonestly, misrepresented facts, and committed fraud by using her sister’s number to obtain consent for the policy and the subsequent changes.
Different versions emerge
The tribunal found that the stories offered by the advisor, the client, and the advisor’s sister changed significantly over time.
In her initial explanation, Ndlangamandla said she had met the client earlier in the year and that the policy was concluded over the phone using a number he provided. She did not mention her sister or any relationship between the client and her sister.
It was only after investigators linked the disputed number to her sister that her story changed. The client later submitted an affidavit withdrawing his complaint, claiming the issue was a misunderstanding. He later testified that the advisor’s sister had previously been his girlfriend.
The tribunal found that these accounts were full of inconsistencies. It noted that the sister initially gave a different explanation about her relationship with the client, while the client himself changed his story and admitted that his original affidavit was false.
“The versions presented by the applicant, the client, and the applicant’s sister differ materially and are marked by several inconsistencies,” the tribunal stated. It also found that the explanations changed over time and became increasingly difficult to reconcile with the objective evidence.
Tribunal rejects misunderstanding defence
A key part of Ndlangamandla’s defence was that the issue resulted from a misunderstanding and that the client had withdrawn his allegations. The tribunal was not persuaded. “The alleged ‘misunderstanding’ was never properly explained,” the decision noted.
The Tribunal pointed out that the cellphone number in the client’s original complaint was different from the one used to provide USSD authorisations. It also dismissed the suggestion that the disputed number was just a data number, noting that USSD consent can’t be obtained through data services.
The tribunal concluded that the probabilities supported Momentum’s claim that the advisor had used her sister’s cellphone number on three separate occasions to make it appear that the client had authorised the transactions. “The inherent probabilities favour the respondent’s version,” the Tribunal said.
Debarment process found fair
Ndlangamandla also questioned the fairness of the debarment process, arguing that a witness was not allowed to testify.
The tribunal rejected those claims and found that Momentum had given detailed notice of the proposed debarment, provided its policies and procedures, invited written representations, arranged for an isiZulu interpreter, and gave the advisor every opportunity to present her case.
The tribunal also noted that the client did testify during the debarment hearing and that there was no evidence suggesting any witness was prevented from giving evidence. “The process accordingly complied with section 14(3) and the Guidance Notice,” the Tribunal said.
Honesty and integrity requirements breached
In its final analysis, the Tribunal concluded that obtaining USSD consent under false pretences amounted to dishonest conduct and a serious breach of the standards expected from financial services representatives.
It found that Ndlangamandla used her sister’s cellphone number to obtain consent for the policy and the two premium increases, behaviour that constituted fraud, dishonesty, and misrepresentation.
The tribunal held that she no longer met the honesty and integrity requirements needed to be considered fit and proper under financial sector legislation.
Her application for reconsideration was dismissed, and a temporary suspension of her debarment was lifted, allowing Momentum Metropolitan Life’s decision to take full effect.
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