Complaints against banks hit record high

COMPLAINTS of harassment by banks and other institutions, mortgage arrears disputes, loan repayments and suspect insurance deals have reached their highest level ever recorded.

Financial Services Ombudsman William Prasifka has confirmed last month saw the most complaints ever sent to the independent watchdog by people claiming to be the victims of heavy-handed bank tactics.

While the exact figure has not been revealed, Mr Prasifka said it is the highest monthly rate since the ombudsman’s office was established in April 2005, and follows a February level higher than any month last year.

And there is further evidence the public is still being mistreated by the banking sector with the watchdog’s latest bi-annual review, published yesterday, showing a massive 40% spike in mortgage-related complaints between the first and second half of 2010.

According to the detailed report, a shocking 7,230 people contacted the watchdog last year claiming to have been mistreated by banks and other institutions, with €2.6 million worth of settlements in favour of consumers.

This figure includes 2,378 cases linked to bank practices, 1,119 to investment issues, 145 to firms outside the ombudsman’s remit and a massive 3,587 to insurance companies.

Bank complaints over all of last year included disputed balances (339), direct debits and standing orders, fees and charges (214), mortgage type changes (158) and repayment terms (235).

Insurance complaints related to house coverage (639), a significant amount of which were cold snap and flooding-related, policy cancellations/refusals (318) and settlements (1,310).

In addition, investment complaints were linked to pensions (148), mis-selling/misrepresentation of policies (294), and fees/charges (228).

A large number of other complaints across the categories also involved poor customer service, hidden costs and bank lending practices (457).

Over the course of 2010 the ombudsman signed off on settlements worth €2.6m to complainants, including €1.3m between June and December.

It was contacted by 7,230 people who made formal complaints and 15,000 via initial phone queries, while 37,500 hits were recorded on its website.

“The large increase in complaints in certain areas reflects the immense difficulties facing consumers and the financial industry as a whole,” the ombudsman confirmed.

“The number of complaints received in 2011... indicates that existing levels of performance are inadequate to address the challenges facing institutions,” he added.

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