Ombudsman: Record levels of complaints over banks

BANKS and other financial institutions are still not dealing properly with customer complaints, according to the financial services Ombudsman.

Complaints remain at record levels, said Bill Prasifka who revealed his office is in discussions with the Department of Finance to reveal the names of institutions complained about.

The Ombudsman’s office ordered almost €1.3 million to be paid out in compensation in the first six months of the year. “A total of 3,600 complaints were received in the first six months of the year,” said Mr Prasifka in a bi-annual review covering January to June of this year.

He also lamented the Government’s decision to slash his budget. “The office has managed to deal with a high level of complaints while budget levels were lower than in previous periods. This is due to the expertise and dedication of the staff here.

“Furthermore, the volume of complaints remains at record levels and this is a matter of concern. The office directed nearly €1.3 million in compensation to be paid to consumers in the first six months of 2010 and this is an indication some financial institutions are not making sufficient effort to resolve complaints at an earlier stage — this would be to everyone’s benefit.”

Speaking to the Irish Examiner, Mr Prasifka, who was appointed seven months ago, said: “Too many complaints are being made and approximately 25% are upheld.”

Although the Ombudsman was reluctant to say the office would like to “name and shame” errant institutions, he was resolute his office needed greater power, even to the extent of amending legislation.

“We do not have the power to name financial institutions and we need that to start a healthy competition among them,” he said. “If there was more transparency, financial service providers could deal more effectively with their customers.”

However, Mr Prasifka was adamant the names of complainants should not be revealed, saying it was a core value of his office their identity be kept secret.

“We all know it is very important in terms of moving the country forward to restore public confidence in the financial sector. Those institutions must deal with complaints more effectively.”

“The way forward for us is not to make more adverse decisions. The proper way forward is for financial providers to make more decisions themselves. At the moment, the level of complaints that reach us is simply too high.”

Among the issues dealt with in the first six months of the year, complaints against insurance companies ranked among the highest.

Complaints about investment products remain at record levels: Over 11,250 telephone calls were received while over 42,000 visits were made to the website.

Other complaints focussed on mortgages and fraudulent withdrawals from ATM machines.

Mortgage complaints accounted for 37% of banking findings issued between the January 1 and June 30 of this year. The main type of complaint in this regard focussed on tracker mortgages.

“There are currently 40 such complaints in the office at this moment,” said the Ombudsman.

“The complaints, in general, relate to the changing from a tracker mortgage rate to another rate, be it either a fixed or variable rate and the information provided to the complainant at that time regarding the ability to change back to a tracker rate.”