Credit card firm tops for failing to comply with regulations

The company that took over MBNA’s Irish credit card business, Avant Tarjeta, had the highest number of findings made against it by the Financial Service Ombudsman in the second half of last year.

For the first time the Financial Services Ombudsman (FSO), Bill Prasifka, has the power to name the firms failing to comply with financial regulations.

Avant Tarjeta led the league table with 33 partially and fully substantiated complaints, followed by AIB with 28 partially and fully substantiated complaints and Bank of Ireland with 19. The report said the banking sector was the most sensitive to being named and had worked to resolve cases, resulting in a 7% increase in the number of findings not upheld or only partly upheld.

“It is our view that a significant driver in the improvement of performance of Financial Service Providers (FSP) in relation to findings in the second half of the year was as a result of the introduction of the new legislation to provide the office with the ability to report on the complaint record of individual FSPs,” the report stated.

Overall, the FSO saw complaints fall by more than one-third, with only 3,042 complaints made to the office of the Ombudsman in the second half of 2013, down from 4,680 in the first half of the year.

Mr Prasifka said this was the first significant fall in complaints since the financial crisis hit in 2007. “For the first time since 2007 there has been a significant decrease in the number of complaints made against financial institutions. This is largely due to new procedures introduced by the FSO during 2013. During 2013, the FSO changed its procedures to ensure that individual consumers and their financial institution actively engaged in trying to resolve the complaint before the FSO became involved. This new approach has resulted in a 35% decrease in complaints being made to the FSO,” he said.

While the overall complaints decreased, there was an 8% jump in the number of complaints that required formal investigation by the Ombudsman’s office.

While there was a fall in the number of complaints the source of grievance for people seeking support from the Ombudsman remained the same, with mortgages or payment protection insurance complaints remaining the biggest issues for consumers.

“The review shows that the issues of mortgage arrears and sale of payment protection insurance continue to be of concern,” Mr Prasifka said.