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Retired man takes High Court challenge over ombudsman’s refusal to investigate loans complaint

Martin Mahoney claims FSPO’s decision not to inquire into 2021 complaint is unlawful and should be overturned

The core issue of the man's 2021 complaint to the ombudsman is his allegation that he was mis-sold loans which, he contends, were inappropriate and unsuitable for him. Photograph: iStock

Aodhan O'Faolain
Mon Mar 11 2024 - 20:23

A retired man has secured High Court permission to challenge the Financial Services and Pensions Ombudsman’s (FSPO’s) refusal to investigate his complaint over loans he claims he was mis-sold by AIB.

Martin Mahoney claims the FSPO’s decision not to investigate his 2021 complaint, on the basis that the complaint is outside the respondent’s jurisdiction, is unlawful and should be overturned.

His complaint to the ombudsman arises from loans in 2005 for €160,000 for 20 years and in 2008 for €30,000 for 17 years.

Mr Mahoney, from Corish Park, Wexford, was in his late 40s when he took out the loans.

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The money was borrowed for purposes including to acquire his family home, to refinance short-term debt and to refinance existing loans. It is on course to be fully paid by 2025.

The core issue of his 2021 complaint to the ombudsman is his allegation that he was mis-sold the loans, which he contends were inappropriate and unsuitable for him.

He claims that because the loans were due to expire six years after he reached his mandatory retirement date, they were contrary to EU consumer law and an EU directive on unfair terms in consumer contracts.

He claims that following a preliminary opinion of his complaint, the FSPO said in March 2023 that it could not investigate because he alleged fraud against the bank. He says he then withdrew the claim of fraud.

However, last November the FSPO said it did not have the jurisdiction to investigate his complaint, which, it said, was outside the allowed time limits.

Represented by Gary McCarthy SC, Andrew Walker SC and Brendan Hennessy BL, Mr Mahoney seeks orders from the court quashing the ombudsman’s decision, and that the respondent be made to consider and determine his complaint.

The action has been brought on grounds that the respondent failed to have regard for the binding requirements of EU law on unfair terms and is entitled to determine complaints involving allegations of breaches of the relevant directive.

The refusal to investigate the complaint is “entirely at odds with previous decisions made by the respondent, and is unfair”, the plaintiff claims. The refusal is also irrational, and unreasonable, he alleges.

Allied Irish Bank plc is a notice party to the action.

The case came before Ms Justice Niamh Hyland on Monday.

The judge, on an ex parte basis, granted the plaintiff permission to bring his action against the ombudsman. The matter will return to court in April.

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