ARTICLE
28 November 2013

Financial Services Ombudsman – Update

M
Matheson

Contributor

Established in 1825 in Dublin, Ireland and with offices in Cork, London, New York, Palo Alto and San Francisco, more than 700 people work across Matheson’s six offices, including 96 partners and tax principals and over 470 legal and tax professionals. Matheson services the legal needs of internationally focused companies and financial institutions doing business in and from Ireland. Our clients include over half of the world’s 50 largest banks, 6 of the world’s 10 largest asset managers, 7 of the top 10 global technology brands and we have advised the majority of the Fortune 100.
The Financial Services Ombudsman, William Prasifka recently published his office's bi-annual review for January to June 2013.
Ireland Finance and Banking

Bi-annual review

The Financial Services Ombudsman, William Prasifka (the "FSO") recently published his office's bi-annual review for January to June 2013. 

The review shows an overall increase in the number of complaints received by 27%, in comparison with the same period last year. 50% of these complaints relate to the insurance sector, 44% of which relate to payment protection insurance ("PPI"), 10% relate to life assurance, 9% to motor insurance, and 9% to household buildings insurance. However, over 79% of the complaints in the insurance sector were not upheld by the FSO.

Complaints handling

According to the FSO, a significant number of financial institutions continue to deal ineffectively with customer complaints. The FSO has therefore introduced a new approach for dealing with customer complaints "efficiently, fairly and effectively".

Consumers are required to engage with their financial institution before they refer their complaint to the FSO, while Financial institutions are required to record their efforts to resolve the complaints "comprehensively and fairly" before referring consumers to the FSO.

The FSO has expressed concern over the 150% increase in the number of PPI complaints made, mainly consisting of complaints relating to alleged mis-selling of the product. The FSO reports that the increase in the number of PPI related complaints are mainly as a result of the increasing financial difficulties of consumers, media coverage and the setting up of companies specialising in PPI claims handling.

In order to reduce the volume of complaints in the insurance sector, financial institutions must ensure that they allow "consumers to fully inform themselves of the products they are purchasing and to familiarise themselves with the conditions of their insurance" at an early stage.

Publication of complaints records – "name and shame" power

Finally, we have previously reported that the FSO has been granted the power to "name and shame" financial service providers that are the subject of complaints. This power is contained in section 72 of the Central Bank (Supervision and Enforcement) Act 2013 and came into effect on 1 September 2013.

Section 72 gives the FSO the power to publish a report naming financial service providers where at least three substantiated or partly substantiated complaints have been made against them in the preceding financial year.

The first report is expected in early 2014. Following recent publicity in relation to the FSO's bi-annual report for January to June 2013 and the enactment of the new FSO legislation, it is anticipated that the FSO will report significantly less complaints in the same period next year.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More