Social welfare fraud - Time to lift the veil of secrecy

Any lingering doubts about the two-faced nature of Irish justice have been well and truly dispelled by the marked contrast revealed in two reports out yesterday showing how different arms of the State deal with people who breach regulations.

Compared with the Government’s aggressive crackdown on welfare cheats, a no-nonsense policy that deserves to be applauded, the disparity is particularly evident in the kid-glove approach forced upon the Financial Services Ombudsman, who deals with complaints about companies.

There is no denying Bill Prasikfa, the ombudsman, has effectively been muzzled when it comes to naming and shaming companies that repeatedly crop up in complaints on how members of the public were treated.

His silence is in stark contrast with the visibly tough approach of the Department of Social Protection towards hunting down those who evade taxes through the black economy or cheat on social welfare payments.

In a welcome initiative, the Government is to bring forward legislation to enable social welfare officials investigate suspected cases of fraud. The proposal to empower officials to present findings directly to the DPP is a development most people will endorse.

At a time when the Government is subjecting the entire population to punitive programmes of austerity to repay the billions borrowed to bail out the banks, it is outrageous, but perhaps inevitable, that some people have no qualms about engaging in social welfare fraud.

No wonder the latest figures reflect a dramatic rise in the reporting of suspected fraud in this area, up from 6,500 in 2009 to 17,000 last year. By preventing fraud, the department has saved €645m, well above its target of €540m for the year. Joan Burton, the social protection minister, should take a bow.

In marked contrast with this robust approach, it is totally unacceptable that the Financial Services Ombudsman’s office lacks the teeth to name companies that regularly appear in complaints from the public. Last year, he received almost 7,300 complaints from individuals, nearly half relating to the insurance sector.

Yet, inexplicably, he is compelled to take a vow of silence. While the number of complaints may have levelled off following years of record increases, the volume of criticism from the public remains alarmingly high. He reports that consumers continue to come under pressure from certain companies, a trend particularly manifest in the mortgage sector. It is disgraceful, though not surprising considering the ombudsman’s lack of power, that individuals and couples struggling to pay their mortgages are coming under pressure to re-negotiate deals.

That makes a mockery of the consumer protection code introduced in 2006 to guard people against undue pressure from financial institutions. Not before time, Fianna Fáil has submitted a bill to strengthen the ombudsman’s powers to name names. That step should have been taken when the party was in power.

This scenario raises some pointed questions. Why, for instance, is the ombudsman prevented from speaking out? Who is protecting the unnamed companies from exposure? It is time that veil of secrecy was removed.