THE OFFICE OF the Financial Ombudsman (FSO) was swamped with complaints during the first half of this year, according to a report published today.
The Office’s Bi-Annual Review for January to June 2013 shows that within that period 4,676 complaints were made by customers to the FSO, a 27 per cent increase on the same period last year.
The report, which covers complaints in both the banking and insurance sector, found that 21 per cent of complaints were settled between consumers and financial institutions, without the need for full adjudication by the FSO.
Banking complaints make up 36 per cent of those received, with mortgage and account products making up the most complaints in the banking sector. In comparison to the same period last year, complaints about mortgages, particularly ‘MARP’ and ‘Tracker’ mortgages, increased by 51 per cent.
The report also covers complaints made against insurance providers. It states that insurance complaints make up 50 per cent of all complaints received to the office. The most significant rise in comparison to last year was in Payment Protection Insurance (PPI) complaints, which increased by 150 per cent and account for 44 per cent of all insurance complaints so far in 2013.
In a statement about the report, the Ombudsman William Prasifka said that same issues and complaint types are recurring each year, stating:
The Banking sector has not shown an improvement in its complaint handling… Although some Financial Institutions have made genuine effort to engage with their customers before complaints escalate, a large number continue to treat the FSO’s Office as ‘just another complaint department’.
This attitude is not in the spirit of regulatory codes or in the interests of consumers. It reflects badly on the financial industry at a time when it needs to actively and genuinely work with its customers.
Speaking on RTE’s Morning Ireland programme this morning, he said the banks seemed to have enough resources to sell their products but did not have enough resources to deal with complaints or to clear up matters for customers. He said he would like to see more investment by banks into these areas.
In relation to the insurance sector he said he was concerned that people are purchasing insurance, often thinking that they are automatically entitled to a payout when they put in a claim, which he said is not the case.
Read the terms
He advised customers to clearly read the terms of the insurance they are buying and said he would like to see customers provided with more transparent information about what products they are purchasing and what their insurance policy entitles them to.
“Insurance and investment sectors must ensure that it allows consumers to fully inform themselves of the products they are purchasing and to familiarise themselves with the conditions of their insurance,” he said.
He added that recent changes to legislation means the FSO will be able to publish complaint records of individual financial institutions in future reviews. He said that he hoped publishing the names of serial bank offenders will encourage financial institutions to work with consumers “to resolve complaints”.