Financial Services Ombudsman reveals details of half-year report

THE Financial Services Ombudsman’s half-year report of significant complaints decisions highlights a number of breakdowns in communication between financial services companies and consumers — ranging from the quirky to concerning.

The ombudsman, Joe Meade, ordered the awarding of €4,500 compensation to a customer of one of the leading banks after the bank had mistakenly posted a letter detailing the person’s overdrawn account to the wrong address, whereupon it was opened by a third party and forwarded to the person for which it was initially intended.

Another case, which resulted in a compensation payment of €2,000, concerned a case of mistaken identity.

A customer who applied for a car loan was refused and told there was a problem with his credit rating and that he had defaulted previously on a loan with the same bank.

The ombudsman discovered that the bank had confused the complainant's records with those of his twin brother.

The suitability of an investment product sold to an 89-year-old woman was the subject of a complaint by the executors of her estate, after her death, and led to an award of €4,000 in compensation.

The woman had invested €500,000 in a secure investment for a period of five and a half years, in 2003. She did this on the advice of a friend of hers who claimed to have investment knowledge and advised her accordingly.

The building society concerned admitted in reply to the ombudsman that it had reservations about the suitability of the product and told the lady’s advisor.

The main reservation was that the investment was a five-year investment and the value would be ‘locked in’ to the end of five years.

If the customer died within the five years then the original investment only would be repaid and none of the locked-in value would be paid out.

Notwithstanding these danger signals, the investment went ahead. Mr Meade ruled that although the building society in question had expressed reservations, it should have gone further to clarify the details of the potential return.

Ombudsman’s duties:

The office of the Financial Services Ombudsman was established in April of last year to act as an independent complaints bureau for customers of all regulated financial services companies.

The office can make awards up to €250,000 to individual consumers, SMEs and unincorporated bodies.