Complaints to the Financial Services Ombudsman have jumped by 21 per cent in the first four months of 2007, according to the ombudsman Joe Meade.

Mr Meade defended his practice of not naming and shaming financial services providers yesterday, but said a public consultation on the issue would be valuable.

Speaking at the launch of his 2006 annual report, the ombudsman said that if he named financial services providers, he might also have to name the complainants, which could deter people from coming forward with legitimate complaints.

The number of consumers who approached the ombudsman with unresolved grievances against financial services providers has steadily risen since he took office two years ago and is likely to increase further before levelling off, Mr Meade predicted.

The ombudsman's office received 1,500 complaints in the first four months of 2007. Some 860 of these related to insurance companies and 640 were in respect of credit institutions. Complaints rose 14 per cent last year compared to 2005.

Some 44 per cent of complaints are upheld. Including negotiated settlements, 60 per cent of cases are resolved in favour of the consumer.

Two complainants are appealing to the High Court the amount of compensation they were awarded by Mr Meade.

Quinn Direct is challenging a ruling by the ombudsman that it must refund customers an administration fee that was not specified in the policy document. The insurer's action follows judicial review proceedings by Irish Nationwide, which were settled in favour of Mr Meade. About 1,200 Irish Nationwide customers will shortly be issued refunds of unlawful six months' interest penalties charged on commercial loans.

The exact cost to Irish Nationwide of refunding the unlawful interest penalties on commercial fixed-rate loans has not been finalised, he said. Although the estimate is €3 million, the bill could end up as high as €6 million.

Meanwhile, Ulster Bank is making a Supreme Court appeal against his decision that it should refund €7.4 million to customers who had seen the value of their investment in its international share portfolio reduced by 15 per cent.

"Ultimately the courts of appeal and judicial review are the ultimate safeguards to ensure I do my job," he said. "I will only name a provider that does not co-operate with me or if it is a serious, systemic issue."

Phone records: proving cases

In his former role as Data Protection Commissioner, Joe Meade regulated when it was permissible for companies to record the conversations they held with customers.

Now the recordings are proving useful in his investigations into disputes between consumers and financial services providers.

Phone transcripts have been used by the financial services ombudsman three times to prove consumers' allegations against financial services providers. In a fourth case they have resulted in a complaint not being upheld.

The recordings led to a €310,000 settlement in one case. After the holder of a life assurance policy died, it was alleged by the insurer that the person had not given them full information about their health. It refused to pay out.

However, a trawl through the phone records yielded a conversation in which an insurance company employee acknowledged the policyholder's condition and said there was no need for the person to inform the company in writing. The insurer eventually paid out on the €310,000 policy - a significant result given that the maximum compensation the ombudsman can award is €250,000.

In one case, a financial company told the ombudsman that "as the transcripts will show", it had acted correctly.

"They didn't think we would ask for the transcripts," Mr Meade said.

... Laura Slattery