The Consumers' Association of Ireland (CAI) has reaffirmed it confidence in its finance spokesman, Mr Eddie Hobbs, following a complaint about conflicts of interest.

Mr John Colgan, a member of the CAI council, wrote to the organisation in May this year complaining about a newsletter sent by Mr Hobbs - who is a financial adviser - to his clients concerning Special Savings Incentive Accounts.

In the newsletter - sent in mid-2001 - Mr Hobbs made reference to the fact that he was the CAI spokesman on finance and that the body has applied a quality standard to the various products in the market.

Mr Hobbs then went on in the circular to recommend a number of products, one of which is sold by a company - Quinn Life - to which Mr Hobbs has provided consultancy work.

Mr Hobbs advised Quinn Life on its entry into the life and pension market four years ago and had an ongoing relationship as an adviser on marketing issues.

The newsletter also recommended five products from other financial institutions.

Mr Michael Kilcoyne, chairman of the CAI, said this weekend that the issue was considered by the executive committee of the association and that Mr Hobbs received their unanimous support. "The council of the CAI has full confidence in Mr Hobbs and so do I," he said.

Mr Hobbs said that the newsletter was intended to make his clients aware of the fact the CAI had carried out some research and that he felt it was appropriate for him to declare his involvement.

He added that in three out of the four recommendations he told clients to contact the local branch of the institution, rather than his company, Financial Development and Marketing.

In May this year Mr Colgan wrote to Mr Dermot Jewell, the chief executive of the CAI, raising the issue of Mr Hobbs's potential conflict of interest, citing the newsletter and a number of other issues. He called for Mr Hobbs to step down as finance spokesman.

He also queried Mr Hobbs's attendance record at council meetings and also whether or not Mr Hobbs conferred sufficiently with other council members before making policy statements on behalf of the CAI.

In June this year Mr Jewell wrote to him saying: "I can inform you that following discussions on the matter the members were unanimous in their support of Eddie Hobbs in his position as spokesman."

Mr Colgan is also a member of the Council of the Insurance Ombudsman Scheme, which deals with complaints from the public about insurance companies.

The CAI is in favour of the replacement of the current ombudsman system - which is funded by the industry - with a statutory ombudsman who would be independent of the industry.

The Government is currently carrying out a consultative process on the issue ahead of the publication of a bill dealing with the establishment of a financial services ombudsman to operate alongside the Irish Financial Services Regulatory Authority.

The CAI made a submission last month, which was prepared by Mr Hobbs, who has queried whether or not Mr Colgan should be involved in formulating CAI policy in this area..

Mr Colgan said: "The whole thing speaks for itself. My position on the ombudsman council is no different to anybody else that is asked to go on such a body."

The ombudsman council made its own submission to the Government on the issue, which is supportive of a statutory ombudsman, subject to a number of conditions, Mr Colgan said.