Complaints by consumers about financial institutions and insurance companies rose 30 per cent in the first half of the year, according to Financial Services Ombudsman Joe Meade.
Mr Meade said some of the increase in complaints could be explained by the downturn in the economy, but the main reason was the clearer complaints procedures set out in a new Consumer Protection Code which came into force last year.
Some 40 per cent of the complaints were made about banks and other financial institutions and 24 per cent related to insurance companies.
Once again, Mr Meade highlighted the “serious” problem of misselling of financial products to elderly people. Asked if the problem was industry-wide, he said it was not systemic in the sense that it was “happening every day”.
“All institutions are affected by this problem. It’s not confined to one bank or insurance company. But even if there was just one case, that’s not good enough”, he added.
The ombudsman highlighted four “outrageous” cases involving misselling to old and frail people in which he had made decisions in the customers’ favour. He said he found it “sad and despairing” not only that the cases had happened but that the institutions had tried to defend their actions.
In one case, an insurance agent drove a vulnerable farmer living alone to a cash machine to secure the sale of an unsuitable health policy while another agent stayed behind in the house. The ombudsman condemned the actions of the agents, ordered the return of €1,520 in premiums and €1,500 compensation.
“It’s like the Wild West but it shouldn’t happen,” Mr Meade commented.
In a second case, a “naïve” bank official facilitated an “interfering neighbour” to deal improperly with and change the account status of elderly siblings’ joint deposit account of €106,000 – the 85-year-old was in hospital and the 79-year-old was deaf. Here, the ombudsman awarded €1,500 in compensation.
Mr Meade revealed he is dealing with 29 complaints arising from the collapse of the International Securities Trading Corporation (ISTC) earlier this year. The sums involved come to at least €5.2 million. Settlement has been made in 10 cases involving a total investment of €1.5 million.
