Finance houses face a new “three strikes and you’re out” policy under new rules allowing the Financial Services Ombudsman to name and shame.
The FSO will be able to identify banks, insurance companies, and investment firms that have three complaints against them upheld.
An FSO spokesman said the law, due to come into force on Sept 1, will make companies learn from past grievances and improve services for customers.
“This is a chance for everyone to make sure that they are dealing with consumers properly and heeding lessons from past complaints,” said the spokesman.
“That way they can avoid being named and shamed publicly.”
Ombudsman Bill Prasifka confirmed he will publish his first report containing details of the outed firms in early 2014. Until now, his office has published reports every six months outlining complaints and which sectors they were aimed at.
It has never identified the offending organisations. The FSO has been calling for the ability to name and shame “for a long time”.
Michael Noonan, the finance minister, signed the new law into the Central Bank (Supervision and Enforcement) Act yesterday.
“This additional provision will mean that financial service providers who are failing their customers will be publicly identified and incentivised to make real improvements,” he said.
Customers with a gripe against a firm are required to make a complaint through the organisation’s internal process. It is only when the customer has been unable to resolve the issue directly with the company that they can approach the FSO. It is then that the Ombudsman acts as a mediator between customer and institution.
If they are unable to reach a solution between them, the FSO launches an investigation into the complaint.
Complaints that are either upheld or partly upheld constitute as a strike — after three strikes, the company is named.
The FSO’s latest biannual report last week showed 4,676 complaints were made to the office in the first half of 2013 — up 27% from the same time last year.
Just over a fifth of those complaints were settled between the consumer and the financial institutions without the need for “full adjudication” from the FSO.
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