Sir, – It should be quite worrying that the Financial Services Ombudsman (FSO) received only 3,700 complaints in the first half of this year. Given the state of the economy and the financial difficulties so many people face, it is inconceivable that only 3,700 remained unhappy with how their financial provider dealt with an issue.
The UK financial ombudsman, upon which the FSO is modelled, received 264,375 actual cases last year, and 1.2 million inquiries, which pro-rata on a population basis would mean the FSO should have received in the region of 19,500 new cases.
Part of the reason why it has such a low level of awareness must rest with the FSO itself. It has to be asked if its failure to make itself more accessible and engage with the public reflects its low referral rate. In general it takes over a year for the FSO to review even the simplest case referred to it; even then, the process is that you hear nothing in that time and then without warning you receive a letter advising the outcome of your complaint without any opportunity for either side to appeal. Other ombudsman schemes allow for an initial opinion to be issued, which sets out how the person reviewing the complaint is minded to determine its merits and then either side can appeal. Only after that appeal is considered and both parties are sent the evidence presented by the other side, is a final outcome reached that cannot be appealed.
It is quite remarkable, and should be of huge concern to the Central Bank and the Department of Finance, that the FSO upholds only 28 per cent of complaints that are referred. It is inconceivable given the financial difficulties people have faced over the last five years that financial services providers are right 72 per cent of the time. In other countries the rate of upholding a complaint to not upholding it is on average 50:50, with higher or lower rates depending on specific products.
Clearly there is a need for the 2004 Central Bank and Financial Services Authority of Ireland Act (Section 16 and Schedules 6/7) to be updated to take account of the monumental changes that have taken place since 2004. It is quite odd that customers seeking redress for a financial services error are still operating under rules writing in 2004.
If the FSO wants to genuinely fulfil its role as an impartial third party, then it needs to get serious about its mission and it needs to raise its profile and increase its involvement with consumer groups. Otherwise it risks being seen as yet another failed quango set up to divert responsibility for mistakes of financial services providers away from where it should be, at the consumers’ expense. – Yours, etc,