Law shaming financial bodies to lack detail of UK system
Irish Insurance Federation concerned move could mean members subject to ‘periodic trial by media’
Irish Insurance Federation: expressed fears. Photograph Brenda Fitzsimons
If, as expected, legislation amending the Central Bank Act 2013 is passed in September of this year, from that date onwards the Financial Services Ombudsman will be in a position to publicly name and shame offending financial institutions that have had complaints made against them. It won’t be a moment too soon for consumers, for whom reports from the ombudsman are of limited relevance – after all, what’s the use in knowing that incidents of mis-selling of investment products are on the rise if you don’t know which providers are behind it?
The Irish Insurance Federation has expressed concern the move could see its members subject to “periodic trial by media”. It also fears that in a smaller market such as Ireland, specific reporting of cases could have a greater impact.
According to ombudsman Bill Prasifka, the naming and shaming of financial institutions is “long overdue” and will commence as “soon as practicable” once the legislation is passed. This will likely mean early next year when it publishes its next report. There will be no retrospective element to the data, because according to Mr Prasifka, the goal is to encourage providers to improve their performance.
The UK financial ombudsman regularly publishes how many complaints have been received against a particular institution and what the complaint related to. Its most recent review, from July to December 2012, shows AIB made the list, as did Bank of Ireland, but their respective complaints of 444 and 633 are dwarfed by the big UK players, such as Lloyds TSB Bank, which had more than 45,000 complaints registered against it. It also reveals what proportion of complaints against an institution were upheld – for the aforementioned Irish banks it was 40 per cent, and 32 per cent, respectively.
In Ireland however, the ombudsman won’t reveal a similar level of detail. In the UK, the ombudsman publishes information on financial institutions for which it has received at least 30 complaints against it. But the Department of Finance has ruled that only information related to complaints that have been upheld will be published - so, for example, if a financial institution receives 10,000 complaints, but only 100 of these are upheld by the Ombudsman, that is the figure which will be published.