It may be too late for investors who bought property syndications from Pickvest (formerly PIC Syndications) to lay complaints with the FAIS Ombud.
PIC Syndications, now Pickvest, promoted property syndications worth approximately R5.3 billion. All outstanding syndications, worth R4.6 billion, are in business rescue and investors are once again complaining of late interest payments. In April 2013, Pickvest’s licence to render financial services was withdrawn by the Registrar of Financial Services Providers. Pickvest, which boasts around 18 000 investors (many of whom are pensioners) appealed the decision and this appeal was dismissed by the Registrar in February 2014.
Desperate investors who attempt to take action against brokers who advised them to invest in the company will be disappointed to note the following provision in the Financial Advisory and Intermediary Services (FAIS) Act.
According to section 27(3)(a) of the Act, the FAIS Ombud must decline to investigate any complaint relating to an act that occurred more than three years before the complaint was received. “Where the complainant was unaware of the occurrence of the act or omission… the period of three years commences on the date on which the complainant became aware or ought reasonably to have become aware of such occurrence, whichever occurs first,” the FAIS Act states.
Recently, a Pickvest investor submitted a complaint to the Ombud against the broker who advised her to put money into the company and was told that the complaint had “prescribed”, due to the above provision in the Act.
In the response to this investor, the Ombud’s office notes, “Pickvest issued a letter dated 30 March 2011 whereby it informed all the investors and advisors of the reduction in the monthly income. In our view, you ought to have become aware of the problem complained about in 2011 when your income from the investment was reduced. This Office received your complaint on 22 August 2014, which is more than three years after the reduction in income. Therefore, this Office is precluded from entertaining your complaint.”
Asked whether the Ombud would treat all complaints in the same manner, FAIS Ombud Noluntu Bam told Moneyweb, “No, each case must be dealt with according to its own merits. So, while the conclusion may have been applicable to a particular case, it remains to be seen whether same would be valid after evaluating another case.”
When Moneyweb enquired whether consumers would forfeit their right to complain against an advisor if more than three years had passed since the time that these consumers had become aware of their loss or potential loss, Bam referred us to the above section of the FAIS Act.
According to one broker, Orthotouch (the company that eventually bought the property syndications on the premise that it would pay investors for the properties over five years) is six months in arrears on its monthly payments. “Orthotouch is currently in the process of sending out registered letters to investors with an offer to settle the matter. Unfortunately we have not received any indication of the contents of the letter yet,” the broker said.
Orthotouch had not yet responded to requests for comment.