Regulator defends internal procedures

THE financial regulator yesterday defended its internal procedures, after the Competition Authority report into banking found consumers suffered from foot-dragging by regulatory staff.

The report also found that some banks were forced to charge less than others for the same service.

This week’s report blasted the “harm to consumers” caused by banks being forced to cancel or delay new customer-friendly services by hold-ups in getting approval.

The Competition Authority found one bank had to wait 12 months to bring in a direct-channel current account service. The regulator took six months to decide whether to give it the green light. A separate high-profile internet-based business banking product took seven months to be approved. Another bank scrapped plans to bring in a mobile phone-based service that would have allowed customers to check the balance in their bank accounts after regulators intervened.

The report also identified a number of examples where regulatory staff discriminated between banks and prevented some from charging levels allowed to others. One bank was told it could not charge a €15.24 unpaid fee for credit card customers, even though another bank was allowed to impose a fee of €19.05.

Responsibility for approving bank charges rests with the Irish Financial Services Regulatory Authority (IFSRA), which took over the function from the Office of the Director of Consumer Affairs (ODCA) last year.

An IFSRA spokesman said yesterday the regulator was not familiar with any of the cases highlighted by the Competition Authority but that it operated in accordance with the appropriate legislation, which sets out time-frames for approving charging requests.

Delays could arise if submissions were incomplete or if more information was required, he said.

The report also said the ODCA stepped outside its consumer protection role to offer strategic advice to banks.