Complaints relating to banking services jump, says ombudsman

Figures from the Banking and Payments Federation of Ireland showed a total of 3,582 mortgages were approved in February with first-time buyers approved for 60.6% of total volume. 

The Financial Services and Pensions Ombudsman, or FSPO, suggested poor customer service in the retailing banking sector fuelled a jump in complaints reported last year.

The FSPO received a record number of complaints in 2023, surging 29% compared to the previous year, to 6,182.

The banking sector made up 62% of the complaints, while 24% of the grievances to the FSPO concerned customer service issues.

“Customer service is again the conduct most complained of for the third year in a row,” said ombudsman Liam Sloyan.

Customer service supports in the remaining retail banks in the Republic have come under pressure after they absorbed a large number of new customers following the exit of Ulster Bank and KBC from the market.

The number of complaints closed by the FSPO also rose by 12% in 2023, with 5,184 complaints closed. Many of these complaints were resolved through dispute resolution processes and early-stage assessments and interventions.

From the 5,184 complaints closed, a value of about €4.7m in outcomes was delivered by the FSPO. Nearly €3m was agreed through mediation.

Contact in relation to the insurance sector accounted for 23% of all complaints, while 461 and 336 complaints were received concerning the investment and pension sectors respectively. The highest number of complaints were made in Dublin, followed by Cork and Kildare.

FSPO staff increased by 35 last month to deal with the rising volume of complaints.

In addition, the FSPO has begun collecting figures this year for non-regulated entities and 74 such complaints were received.

Further pressure could be put on the FSPO as last month the Central Bank acknowledged complaints made by mortgage customers whose loans are owned by vulture funds cannot be considered by the FSPO through a legal loophole.

Meanwhile, separate banking industry figures confirmed modest recovery in mortgage lending so far this year but the switching market has dried up because of high interest rates.

Figures from the Banking and Payments Federation of Ireland showed a total of 3,582 mortgages were approved in February, with first-time buyers approved for 60.6% of total volume. First-time buyer mortgage approvals reached a record annualised high of €9bn in the month.