Banking ombudsman reports fewer complaints

STOLEN cheques, elderly women losing €52,000 on the stock market and disputes over incorrect lodgements and frozen accounts meant it was business as usual last year for the banking ombudsman, whose annual report was published yesterday.

But the bad press faced by the country’s banks during 2004 was not reflected in the number of customer complaints to the watchdog, which fell almost 20% to 870.

The Ombudsman for Credit Institutions, which was set up by banks and building societies to settle disputes between them and their customers, said more than half of the complaints received by his office were resolved after referring each case to the institution in question. The bank or building society’s internal procedures were then used to hammer out a deal with customers who had found fault.

Only in 43% of cases, or 373 in all, did the ombudsman’s office intervene to issue a ruling. The office displayed its customary even-handedness by siding with complaining customers in 53% of cases, while the banks came out on top 47% of the time.

Gerry Murphy, who has held the position of ombudsman since the office was set up 15 years ago, said the fall-off in complaints showed banks were doing more to resolve disagreements. This resulted in fewer people feeling the need to look for a third party to settle their disputes, he said.

The operation and management of bank accounts was the single biggest issue causing conflict between banks and their customers, according to the ombudsman’s report. Over a quarter of all complaints came from these disputes. Disagreements over mortgages, personal loans, investments and credit cards also featured high on the list.

In a year when AIB’s foreign exchange charges attracted controversy, however, only 5% of complaints focused on currency issues.

Yesterday’s report was the last that the Ombudsman will issue before the office is dissolved. It will become part of the Financial Services Ombudsman Bureau, which will handle all consumer problems with the financial services industry from April 1.

Mr Murphy will become deputy ombudsman under the new regime and will continue to handle complaints in relation to banks, building societies and hire purchase providers. The bureau will also oversee disputes involving life assurance companies, credit unions and insurance brokers. The new body comes into force under legislation brought in last year to improve the regulation of the financial services market and make the industry more consumer-friendly.

The ombudsman has handled more than 15,000 complaints since the office was set up and has the power to force banks that have disadvantaged their customers to pay up to €100,000 in compensation.