CAN A financial ombudsman make a difference to consumers aggrieved at their treatment by banks, building societies, insurance companies and others? To judge by the huge volume of complaints the Financial Services Ombudsman (FSO) received last year, his office clearly inspires the public’s confidence that it can do so.
In 2008, some 6,000 consumers filed complaints for investigation, an increase of one third on the previous year. In a financial and economic downturn where the personal savings and investments of most people have declined sharply in value, anxious savers and investors are increasingly concerned to protect their assets. Against the backdrop of huge volatility in global financial markets the public, rightly, has become more vigilant and questioning in relation to financial transactions.
Where mis-selling of investment products, professional negligence or fraud may have arisen, the FSO provides the public with an inexpensive remedy. The role of ombudsman Joe Meade is to adjudicate on complaints received, to redress wrongs and, where justified, to award compensation to complainants. The office of ombudsman has been operating for 3½ years. In this time it has handled 17,400 unresolved complaints. It has settled close to nine out of 10 of these cases. And over 60 per cent have been resolved in the customer’s favour.
Mr Meade yesterday gave details of 11 significant findings that he has issued since last July. These illustrate the range of the FSO’s remit. His office has ruled on unauthorised credit card transactions. It has recovered money stolen from a pensioner’s bank account and it has awarded compensation to those who have received bad investment advice. Once again, the ombudsman has expressed concern about how credit unions invest money on their members’ behalf. His criticism was prompted by a complaint made by a credit union that had lost €1 million in what became a worthless investment. On investigation, the ombudsman found the broker who had sold the investment product had failed to inform the credit union of the major financial risks involved. But Mr Meade also found the credit union committee that approved the high-risk investment chose not to inform itself on its suitability. This contributory negligence meant the credit union has lost half its original investment, with the broker ordered to refund €500,000. The ombudsman is correct to be concerned that some credit unions may be exposing members’ funds to unacceptable risk.