Record complaints to ombudsman

Complaints about financial institutions remained close to record levels in the first half of 2010, with more than 3,600 new cases received by the Financial Services Ombudsman.

William Prasifka has ordered that almost €1.3 million be repaid in compensation to consumers as a result of his office’s investigations.

“This is an indication that some financial institutions are not making sufficient effort to resolve complaints at an earlier stage - this would be to everyone’s benefit,” Mr Prasifka said.

The ombudsman’s office is dealing with 40 open complaints in relation to mortgage borrowers who were persuaded by their lenders to abandon favourable tracker mortgages and switch to fixed- and variable-rate loans.

The borrowers claim they were not informed by the lenders that it would be impossible to switch back to tracker mortgages, which have been withdrawn from the market. Mr Prasifka’s office is discussing the issue with the Financial Regulator, which over the last two years made repeated warnings to lenders not to force borrowers to leave their tracker deals.

Mr Prasifka said his office had managed to deal with a high level of complaints despite operating on a lower budget than in previous years. “The volume of complaints remains at record levels and this is a matter of concern,” he said.

From January to June, the ombudsman’s office received more than 11,250 calls to its consumer helpline, while more than 42,000 visits were made to its website.

At the start of 2010, the ombudsman’s office had 3,403 unresolved cases on its books and received 3,631 new complaints. By the end of June, it had closed 3,656 complaints, leaving it with 3,378 ongoing cases.

During the period, some 1,735 complaints that could not be resolved either directly by the financial institution or by mediation were referred by the ombudsman for full investigation.

Almost half - 49.4 per cent - of the complaints received relate to insurance products, while 31.6 per cent relate to banking activities. A further 17 per cent of complaints involved investment and pensions.

A quarter of insurance complaints and 37 per cent of investment complaints were upheld by the ombudsman, while in the banking sector, some 44 per cent of complaints were upheld.