Proposal to ‘name and shame’

THE Financial Services Ombudsman wants to give a blow-by-blow account of complaints it has received.

Banks who have provided bad service and paid compensation to customers should be “named and shamed”, according to the FSO.

William Prasifka is proposing a change in legislation which would allow it to publish the complaints.

According to its annual report more than 7,200 complaints were received last year and the Ombudsman expects the figure to be even higher this year.

About a quarter of the complaints were upheld last year with compensation of about €2.6 million awarded.

The report pointed out that it is very disappointing that the numbers of complaints for products and services such as pensions, household insurance, motor insurance and ATMs have not fallen, but remained at a consistent level in every quarter of 2010.

The FSO said having the power to name and shame would lead to better, more pro-active complaint handling by financial institutions. It said it is in the best interests of both the industry and consumers.

It said it would like to see financial institutions making a “major effort” to improve their complaint record. They said this will be an important factor in building public confidence in the financial services sector.

It said an improvement in this area would be to the mutual benefit of the industry and consumers and reduce the need for complaints to be referred to the FSO.

Mr Prasifka said the financial crisis has shaken public confidence in financial institutions and he said a renewed commitment by those institutions to customer service and complaints handling is required.

“The changes proposed by this office will give our financial institutions every incentive to make such a commitment,” he said.

Mr Prasifka said there has been a big increase in the number of complaints about mortgages as more people get into financial difficulties and fall into arrears.

The Irish Banking Federation said it and its member banks are “fully committed” to working with the Ombudsman’s office to help further reduce the number of customer complaints that arise, particularly in light of the fact that 75% of all complaints received were not upheld during 2010.

The FSO has invited observations from industry and interested parties.