Ombudsman complaints - Public are protected by watchdog
By any standard, the report issued yesterday by Financial Services Ombudsman Joe Meade is a breath of fresh air and welcome proof that the office is armed with sharp teeth.
With millions of euro flowing into people’s pockets from SSIA savings schemes, the findings are a timely warning of the need for caution by anyone pondering what to do with his or her nest egg.
The time-worn adage, that a fool and his money are soon parted, springs to mind. However, even the most careful can be given wrong advice, be conned by cowboy operators, or fall victim to unforeseen events in financial markets.
During the nine-month period up to the end of December, the Ombudsman received some 2,600 complaints, a 23% increase on the previous year. He found in favour of 50% of those investigated while others were either settled amicably by mediation or not upheld.
While the insurance sector attracted most complaints, insurance sold by travel agents and tour operators is outside his remit and a code of practice is urgently needed in this area. Equally, all of An Post’s financial services should come under his remit.
The salutary tale of an elderly couple is a stark reminder of what can happen when things go wrong. They were sold a €120,000 high-risk investment package but saw the value of their life’s savings fall to €30,000 inside three years.
A financial disaster with frightening implications, particularly for a couple in their twilight years. In the event, the Ombudsman made an award of €56,000 against a credit institution.
Despite getting a warm welcome from the industry on his appointment, Mr Meade yesterday accused some firms of making noises about his role by effectively claiming his legal powers were not within the Constitution.
It was to be expected, perhaps, that as soon as he began flexing his muscles, some elements would begin to feel the squeeze. The upshot is that a handful of firms are complaining he has too much power.
Such a protective attitude is unacceptable. While investment advice always comes with a health warning, in the shark infested waters of the financial world, people need all the protection they can get.
Undoubtedly, the bona fides of the vast majority of companies is beyond question but there is always the risk that naive individuals, unaccustomed to complex financial dealings, could fall victim to so-called experts purporting to offer the best advice, not to mention fly-by-night operators.
If and when that happens, the Ombudsman is often the first recourse of those in need of help. Under his considerable powers, he can make awards up to €250,000, take evidence under oath, seize documents and, if necessary, direct that practices be changed.
It goes without saying that if companies are genuinely concerned, they have a right to question the constitutional standing of the Financial Services Ombudsman in the courts.
But if firms persist in making spurious constitutional threats against the Ombudsman, with the specific aim of preventing him from investigating complaints, then they should be named and shamed.
Having made it abundantly clear he will not be intimidated, the public can be confident that the Financial Ombudsman will fulfil his commitment and continue doing his job without fear or favour.
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