Regulators aplenty but consumers still left hanging for resolution
Far too often, bullied customers are let down or ignored by disparate bodies
Permanent TSB’s Jeremy Masding (left), group chief executive, and Alan Cook, chairman, at the bank’s mortgage redress press conference this week. Photograph: Eric Luke / The Irish Times
At the same time, the State-owned Permanent TSB was hauled over the coals for grievously failing almost 1,400 mortgage customers and committing a series of serious errors that coast at least 22 people their homes.
The three mobile phone operators pleaded guilty to multiple charges at Dublin District Court.
Vodafone was fined €10,000, and Eircom was hit with fines totalling €21,000. For its part, Three was told it could spare a conviction if it donated €15,000 to charity.
Judge John O’Neill singled out Eircom for special criticism. He branded their code of practice a joke and said when customers complained they were “pushed from Billy to Jack and they were ignored”.
He said customers were upset, petrified and “worried sick” when they received letters from debt collectors acting at the behest of Eircom. In one case, an elderly man living in a nursing home was hounded after he cancelled his account.
Vodafone overcharged another man who had suffered a serious injury and had cancelled his account. The customers were refunded only after ComReg got involved. Even more egregiously, Permanent TSB fought a rearguard action against both its customers and the Financial Services Ombudsman, denying any wrongdoing even in court.
It wasn’t until the case reached the steps of the Supreme Court that the company eventually conceded that it had made serious mistakes which had cost its customers dearly.
It was only at that point the Central Bank got involved, like a breathless and bloated old man racing to catch up with a tearaway teen. After an investigation, the scale of the bank’s mistakes were laid bare. The lender will be hit with fines of around €20 million and is likely to have to compensate its customers to the tune of around €35 million.
But questions hang heavy in the air. Why did it take so long for these actions to be resolved and why were the hurdles the consumers had to jump to ensure they were resolved so high? And what about the sanctions?
While the power of the district court to levy fines is limited, in the bigger scheme of things the penalties handed down to the mobile operators are derisory.
Does anyone think Eircom cares about a fine of €21,000? Will Three struggle to cobble together the charitable donation of €15,000 it needs to avoid the conviction?
And does anyone think giving someone €50,000 after effectively robbing them of their home and causing them years of unimaginable stress and anxiety is enough?
But it is not just monetary matters that should concern. What about all the time it took to have the problems outlined above resolved? It took over a year for the mobile operators to be brought to heel via the official regulatory channels. And the bank dug its heels in for around five years before eventually ’fessing up.
It is a depressing reality that this newspaper could have solved the mobile phone customers problems in less than 24 hours. That is not to blow our own trumpet or lay claim to any class of magical power, far from it. Rather it is to acknowledge a fact that big companies hate nothing more than bad press and when we contact them on behalf of customers who have been let down, they fall over themselves to make things right in order to make themselves look better in print or on the airwaves or on television.
On the surface, Irish consumers appear to be well-served by representative groups. There is a Competition and Consumer Protection Commission, a Consumers’ Association and a European Consumer Centre. There is a Small Claims Court, a Financial Services Ombudsman and a communications watchdog.
Yet far too often we see people let down or ignored by the disparate bodies, funded at a cost of many millions of euro by the taxpayer, largely because the bodies are hamstrung by legislation or funding problems, or rendered toothless by politicians.
Last year, a major report by the Free Legal Advice Centre (Flac) into the level of consumer protection available to vulnerable people dealing with financial institutions found that consumers were deprived of many of their rights and protections across the financial sector during the boom. It was critical of the FSO.
It said making a complaint to the financial services ombudsman was “overly formal, impersonal, onerous and confusing to the extent that many consumer respondents appeared to have become almost completely lost in the process”.
Consumers who had first-hand experiences of the process told Flac they “regretted the lack of opportunity to question their provider representative directly in the presence of an FSO official by way of an oral hearing” and it said consumers it spoke to “perceived [it] to be conservative and pro-provider”.
The FSO rules in favour of consumers only a quarter of the time and two-thirds of the complaints are only partly upheld – which can mean as little as €500 in a case involving sums of €220,000.
At the time of the report’s publication, the Ombudsman Mr Prasifka offered a robust defence of his office and the role it plays. He accepted the system was formal and complicated but insisted voluminous paperwork was required by law.
“We are accessible and we are fair,” he told this newspaper then. “When it comes to adjudications we are not an industry advocate or a consumer advocate. We aim for fairness.”
And to be fair to the FSO, its fairness has never been called into question and it does what it does very well. But maybe people need a bit more.
Defend the rightsThe Irish Times
If it set up a unit to identify companies that let consumers down, it might make all our lives easier. This unit could take complaints, make contact with alleged rogue traders and give them a chance to resolve situations. And then highlight what they have done – or not done – to improve a consumer’s lot. All its work could be published online or in print weekly. Done right, companies would learn to respect it and consumers would learn to love it.
The agency could have trained staff to represent consumers at the Small Claims Court and at hearings held by the Financial Services Ombudsman and it could help people deal with ComReg and draft correspondence with banks.
Fairness and balance are all well and good but sometimes what people need is someone with clout to fight their corner. It doesn’t seem too much to ask.