What used to take a paragraph or two now comes in book-sized tomes, often with fake legal cases as references. From Moneyweb.
The idea that artificial intelligence (AI) will ease workloads is certainly not happening at the National Financial Ombud (NFO).
Complaints that previously would take a paragraph or two are now – with the aid of AI – coming in 150-page tomes, often with fake legal cases as references, says Reana Steyn, NFO CEO and head ombud, speaking at the Conduct Risk Conference in Midrand on Wednesday (11 March).
Listen/read: Life insurers repay R140m after disputed claims reviewed [Oct 2025]
Where the complaints adjudicators would previously look at a paragraph and make a call on whether to investigate further, they are now required to review complaints that sometimes run to 150 or even 200 pages. It’s clear these are drafted using AI.
“We’re supposed to be a speedy and efficient dispute resolution body. The institution against which the complaint is made is also using AI to reply,” says Steyn, adding to the ombud’s already stretched workload.
Steyn says the ombud takes pain to ensure responses are crafted by humans, not AI.
False facts being dished up
Some of the case law cited in these AI-generated complaints to the NFO are completely fake. This is a problem that has already surfaced on multiple occasions in SA courts (see below).
Fake or not, these complaints and the legal citations have to be researched and investigated by the NFO.
The ombud says it must strike a balance between consumer advocacy and impartial resolution.
About half the credit-related complaints were decided in favour of consumers in 2024. The figure was 25% for life insurance, 12% for non-life insurance and 21% for banking services.
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The NFO’s 2024 report – released in 2025 – shows nearly 36 000 complaints received between March and December of that year, with 28 000 resolved in the same period.
The ombud recovered R328 million for consumers, with an average of 115 days to resolve a case. In cases involving the banks, the time to resolve a case is about 52 days.
“Over the past year, the organisation recovered a staggering R328.5 million on behalf of consumers, a figure that speaks volumes about the power of independent mediation and the tangible benefits the NFO delivers,” says the 2024 annual report.
Listen: NFO recovers R328m for aggrieved consumers [Jun 2025]
The NFO was created in 2024 to amalgamate four predecessor ombuds: credit, banking services, long-term insurance and short-term insurance. This makes it easier for consumers to lodge complaints under a single umbrella organisation.
The Pension Funds Adjudicator and Financial Advisory and Intermediary Services (Fais) ombud continue to operate independently.
Stats … and additional pressures
Steyn says the NFO receives tens of thousands of calls and emails a month.
When complaints don’t go the way of the consumer, many take to social media to relitigate their complaints.
About 5% of complaints at the NFO come from people over 85, many of whom are less comfortable in a digital environment. The NFO has a policy for vulnerable customers, offering extra duty of care to those in poor health, or suffering financial or other hardships.
The Financial Sector Conduct Authority (FSCA) has issued multiple warnings about AI-generated fraud.
Listen/read:
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Scammers exploit AI to create convincing impersonations that lend false legitimacy to unauthorised investment schemes, fake trading platforms, and solicitation of funds via apps like WhatsApp, Telegram, and Facebook.
Fake case law dreamed up by AI
In one recent case before the KwaZulu-Natal High Court, Judge Elsje-Marié Bezuidenhout issued a stinging rebuke against law firm Surendra Singh and Associates for apparently fabricating legal citations using AI in an appeal case.
“In this age of instant gratification, this incident serves as a timely reminder to, at least, the lawyers involved in this matter that when it comes to legal research, the efficiency of modem technology still needs to be infused with a dose of good old-fashioned independent reading,” ruled the judge.
“Courts expect lawyers to bring a legally-independent and questioning mind to bear on, especially, novel legal matters, and certainly not to merely repeat in parrot-fashion, the unverified research of a chatbot.”
The same type of AI hallucination appeared in another case in 2025, this time in the Gauteng High Court, and was referred to the Legal Practice Council.
