Firms hit by funds mismanagement

NOT even financial institutions are safe from funds mismanagement by other institutions, according to the latest round of decisions from the country’s financial watchdog.

In one complaint handled by ombudsman Joe Meade recently, a credit union was among the luckless clients who found themselves stuck with €2 million in worthless investments after being encouraged to invest in a high-risk scheme.

In another example of people who would seem best able to keep tabs on financial institutions instead coming off worst, Mr Meade also investigated the case of a solicitor who ended up the victim of a €111,000 cheque fraud.

The cases are among a number of bizarre and worrying complaints about questionable banking and investment practices that came before the ombudsman’s office since last July in what was his busiest year to date.

New complaints received during 2007 numbered almost 4,400 — a 15% increase over 2006 — but senior investigator Conor Cashman said the number for 2008 represented a considerable increase again. Full details will be released by the office later this week when Mr Meade explains some of his most significant recent findings.

“The numbers are up a lot across the board but particularly in the area of investments and alleged mis-selling of investment products and also the extent to which people were informed of the risks involved,” Mr Cashman said.

Other cases Mr Meade will present in detail on Thursday include that of an old age pensioner whose life savings were cleaned out by fraudulent ATM cash withdrawals and a honeymoon couple whose trip of a lifetime was marred by fraudulent credit card transactions.

Another complaint involved a bank which misplaced the title deeds to a house for more than 20 years and in another case a complainant had made a €200,000 tax settlement after being wrongly notified they were the holder of a bogus non-resident account.

The Financial Ombudsman investigates complaints about banks, building societies, credit unions, insurance companies including health insurers, stockbrokers, pawnbrokers, money lenders, and bureaux de change among other financial service operators.