Rise in complaints about mortgages

THE FINANCIAL Services Ombudsman saw a 41 per cent rise in mortgage-related complaints in the second half of last year.

The ombudsman, Bill Prasifka, said complaints regarding tracker mortgages in particular had increased substantially in recent months.

In his biannual review of complaints, Mr Prasifka said his office had received 3,599 complaints about financial services in the second half of 2010, down slightly on the 3,631 filed in the first six months of the year.

However, issues surrounding tracker mortgages – most often people arguing that they were unaware when leaving a tracker mortgage for another rate that they would not be able to return later to a tracker – more than doubled to 115 from 40 in the first half of the year.

“The large increase in complaints in certain areas reflects the immense difficulties facing consumers and the financial industry as a whole,” Mr Prasifka said. He cited the continued increases in mortgage and investment complaints as a cause of concern.

Overall, the insurance sector remains the area most likely to be subject of complaint, accounting for 49.6 per cent of all submissions.

A review by the Central Bank published earlier this week found that no insurance company inspected was fully compliant with the code of protection for consumers.

However, fewer complaints about insurance companies (19 per cent) were upheld entirely or in part, compared to just under 30 per cent for banking and investment issues.

In total, the Financial Services Ombudsman awarded compensation of €1.35 million in the second half of the year, bringing the figure for the full year to €2.65 million.

Almost half of all compensation awarded in the second half of the year (€806,262) went to consumers complaining about matters relating to investments. A total of €284,253 was paid in compensation over irregularities in the insurance sector, with €261,846 awarded for banking matters.

“The fact that over €2.6 million was awarded in compensation . . . shows that some financial institutions are still not making efforts to resolve complaints sooner. Of even greater concern is the substantial increase in the number of complaints received in 2011,” he said.

The ombudsman received more complaints in February this year than in any month in 2010 and, in March, the level of complaints exceeded any month since the office was established in 2005.

“Much more needs to be done to begin to restore public confidence to the sector,” Mr Prasifka said.