Joe Meade
World Bank Workshop Bratislava -13 June 2007
What is an Ombudsman?
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An independent and impartial means of
resolving disputes outside the courts.
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Investigates matters after a complaint that has
been made to the financial service provider has
not been resolved to the complainant’s
satisfaction.
2006 complaints
Insurance
Insurance*
1886
Health
100
Intermediaries 142
Others
101
Total
2229
*Non life 1289
Life
597
Credit Institutions
Banks
1302
Building Socs. 116
Credit Unions
33
Stockbrokers
30
Intermediaries
54
Others
31
Total
1566
Complaints trends
Complaints received since April 2005
Insurance
Credit Institutions
2007 –End May
950
2006
2229
1566
April 05 – December 05
1734
870
750 (+21% over 2006 period)
14% increase in 2006 with a 37% for credit institutions-credit unions, stockbrokers, intermediaries
account for some of this
60% of complaints upheld; 40% not upheld
Travel insurance is largest area of complaint followed by motor and life assurance
Account transactions, mortgages and credit cards are the largest credit institutions complaints
33 Credit union,30 stockbrokers and 200 intermediaries complaints included in the 2006 figures
Why have a Financial Services
Ombudsman?
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Voluntary ombudsman schemes in Ireland both for the credit
institutions and parts of the insurance sector since the early 1990s.
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Recognition by these sectors that a complaints resolution process
outside of the Courts was necessary and appropriate.
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However all financial service providers were not part of these
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Financial scandals in Ireland during the 1990s
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McDowell Report 1999-new Regulatory regime including a statutory
Financial Ombudsman.
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The Central Bank and Financial Services Authority of Ireland Act
2004
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Section 16 and Schedules 6 and 7.
What is the Financial Services
Ombudsman
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Statutory body funded by statutory levies from the
financial services providers
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Operational on 1 April 2005.
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Existing voluntary schemes were subsumed into it
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Number of financial service providers covered by its
remit was expanded considerably.
What is the role of the Financial
Services Ombudsman?
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The Financial Services Ombudsman is a statutory
officer who deals independently with complaints from
consumers about their individual dealings with all
financial services providers that have not been resolved
by the providers. Decisions can be appealed by either
party to the High Court.
The Ombudsman is therefore the arbiter of unresolved
disputes and is impartial.
It is a free service to the complainant.
Broader issues of consumer protection are the
responsibility of the Financial Regulator.
What organisations can be subject to
investigation by the Ombudsman?
All financial service providers (FR and Cr) including:
 Banks
 Building Societies
 Insurance companies both life and general
 Credit Unions
 Mortgage, Insurance and other credit intermediaries
 Stockbrokers
 Pawnbrokers
 Moneylenders
 Bureaux de change
 Hire Purchase providers
 Leasing companies
 Credit sales companies
 Health Insurance companies
Who can complain to the Financial
Services Ombudsman?
 All
personal customers
 Limited companies with a turnover of €3m
or less
 Unincorporated bodies, charities, clubs,
partnerships, trusts etc.
What complaints can be dealt with?
Any kind of complaint by consumers where they
feel they have not got satisfaction about:
 The provision of a financial service by the
financial service provider
 An offer by the provider to provide such a
service
 Failure by the provider to provide a particular
financial service that has been requested
What complaints cannot be
made?
A consumer is not entitled to make a complaint if
the matter complained of:
 Is or has been the subject of legal proceedings
before a court or tribunal
 Occurred more than six years before the
complaint is made
 Is within the jurisdiction of the Pensions
Ombudsman
Can the Ombudsman decline to
investigate a complaint?
A complaint may not be investigated by the
Ombudsman if in his opinion:
 It is vexatious or frivolous or not in good faith
 The subject matter is trivial
 The conduct complained of occurred at too
remote a time to justify investigation
 Other redress means were available
 Complainant had no interest or an insufficient
interest in the conduct complained of
If a complaint is upheld what redress can
the Ombudsman order for the consumer?
The Ombudsman can direct the service provider to
do one or more of the following:
 Review, rectify ,mitigate or change the conduct
complained of or its consequences
 provide reasons or explanation for that conduct
 change that practice
 pay compensation up to a maximum of
€250,000 or €26,000 annuity
 take any other lawful action
What if financial service providers
refuse to cooperate?
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The Ombudsman has extensive legal powers to require
the financial service provider to provide information
including the power to require employees to provide
information under oath.
If necessary the Ombudsman can enter premises of
providers and demand the production of documents etc.
In the case of non compliance the Ombudsman can seek
a Court Order.
Anyone who obstructs the Ombudsman commits an
offence and is liable to a fine of up to €2,000,
imprisonment for three months or both.
Financial Consumer Protection in an
Irish context
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Central Bank
Financial Regulator
Financial Services Ombudsman and Pensions
Ombudsman
Prudential role
Consumer role
Statutory Consumer Protection Code
Surveys and Publicity
Liaison with Ombudsman
Co-operation with the Financial Regulator, the
Pensions Ombudsman and the Financial Services
Ombudsman
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Close co-operation between the Ombudsman, the Financial Regulator and
the Pensions Ombudsman.
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When investigating a complaint if a matter comes up that is felt to be
indicative of some kind of pattern or a systemic matter, the Ombudsman will
inform the Regulator so that appropriate regulatory action may be taken.
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However, would like to emphasise that the Financial Services
Ombudsman is essentially an arbiter in disputes between customers
and institutions and is not a Regulator.
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Also cooperate with the Pensions Ombudsman so as to avoid unnecessary
overlap in the pension’s area. Pensions Ombudsman deals with
occupational pensions disputes but not their sales.
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A memorandum of understanding has been signed by the three
organisations
Ombudsman considerations
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Did you act fairly and can you prove that to me-transcripts or tapes
Was the investment advice appropriate
Was documentation clear
Did you take advantage of a particular situation-troublesome
customer or vulnerable person
Were the refusal reasons reasonable or justified
Too zealous perhaps in applying money laundering aspect
Did you take advantage of a person’s age
Were you discriminatory because of another matter perhaps-deeds
of house
Was commission more important than necessity-PPI
Was complaint dealt with properly and reasonably at all stages
Duty of care goes both ways
Would I be happy-or could I defend- if I was the customer who was
refused service or not properly treated
Ombudsman’s decisions
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Penalty interest charge on early
redemption of commercial loansjudicial review on one of the cases not
successful; look back by Building
Society €5m+
Application of accounting adjustment
to an investment fund- €7.4m
compensation awarded- under Court
appeal
Insurance matter-appeal on look back
Error by insurance brokers- €140,000
and €50,000 settlements
€40,000 against a stockbroker for not
acting on instructions
€16,500 – conflict of interest mortgage
broker in sale of a property
€90,000 insurance award as only
Courts can determine whether an
illegal had occurred
Phone records access
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€80,000 claim for storm damage not
upheld on technical advice
Credit Unions- €24,000 for not
respecting elderly persons instructions
€38,500 award re derivative
investment advice to elderly
Medical treatment abroad- prior
approval and not upheld
Courts and International
comparisons
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Informal by nature and legislation- without regard to technicality or legal form ( 57BK
4)
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Directions
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Judicial review
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Appeals
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Point of law referral during investigation
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Evidence under oath
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Enforcement orders
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Injunctive powers
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Ireland's Ombudsman is significantly different to all other countries-voluntary
schemes
What is needed
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Independent
Strong and unpopular if necessary
Removal not to be an easy matter
Adequately Resourced
Strong Powers
Financial Resources
Fair and impartial
No Confusion about role-not an advocate or a
champion but an independent arbiter
 Appropriate to your custom and legal situation
Contact Details
Financial Services Ombudsman
3rd Floor
Lincoln House, Lincoln Place
Dublin 2
Ireland
 Lo Call: 1890 88 20 90
Tel: +353 1 6620899
Fax: +353 1 6620890
 Public Office Hours
09.30hrs - 13.00hrs
14.00hrs - 17.00hrs
Email enquiries@financialombudsman.ie
Website
www.financialombudsman.ie