Record gripes in bank fiasco

The Ulster Bank fiasco drove a record breaking number of complaints to the Financial Service Ombudsman over July and August.

The Ombudsman, Bill Prasifka, received a record 872 complaints in July and 725 in August.

The figures were contained in the Financial Service Ombudsman biannual review, which was reviewing the first two quarters of the year. Mr Prasifka said that the contents of the report were of serious concern to his office.

The report revealed that the ombudsman awarded €790,000 in compensation to people who complained about the behaviour of the financial sector, including insurance, banking and investment firms.

Mr Prasifka said the number of complaints being upheld and partly upheld by his office were increasing which showed institutions were not doing enough to remedy complaints before consumers felt they had no choice but to contact his office.

“The FSO always encourages Institutions to engage with Consumers to resolve complaints as soon as possible. While 25% of complaints were settled by institutions, the increase in complaints received and complaints upheld by the FSO shows that institutions are still not doing enough to engage with consumers at an earlier stage,” he said.

There was a doubling in the number of complaints relating to the mis-selling of payment protection insurance (PPI), complaints about which rose from 218 to 410 with 74% alleging a mis-sale.

Mr Prasifka said despite the increase the number of complaints upheld by the ombudsman were in line with the insurance industry norms. “We can not say that PPI’s are an outlier based on complaint performance. If there was a spike in the number of complaints upheld we would be concerned,” he said.

The single issue that attracted most people to contact the ombudsman’s office was mortgage complaints. Mr Prasifka said the financial crisis had made people more willing to question their banks, and this, combined with people facing financial difficulty, was fuelling mortgage complaints. Tracker mortgages and the terms of mortgages were the main causes for concern.

In total the office handled 3,700 complaints against financial institutions in the first half of 2012, a 5% increase on the last six months of 2011.