Press Release - 18 October 2007

Eighty six year old bachelor farmer’s €1.4m fortune ‘underinvested’ and payment protection policies mis-sold to construction workers

Financial Services Ombudsman, Joe Meade, today published on his website

http://www.financialombudsman.ie/case-studies/

two recent decisions he made. He considers that these complaints raised serious issues and that it is appropriate to bring them to public attention now rather than wait for his normal six monthly publication of case studies next due in January 2008

• An 86 year old bachelor farmer sold his farm for €1.4m; after advice from a bank official he invested €850,000 in two six- year fixed term insurance bonds which, when he died seven months later, were worth €50,000 less than the original investment; the Ombudsman directed that the €50,000 loss be made good to his estate. Though not part of the complaint the Ombudsman noted that another €150,000 was put in a current account and €350,000 in a demand deposit account. The Ombudsman considers that all institutions should, as a matter of routine, review bank accounts of elderly people so that appropriate amounts are held in them and that the lowest or no interest rate, which applied in this particular instance, is not the norm for such investments. He has, since being appointed Ombudsman in May 2005, published eight case studies about the unsuitability of investment products sold to the elderly and other matters affecting the elderly; he is disappointed that the issues are of a recurring nature.

• €2,100 refunded in payment protection policy premiums as a building worker was not covered because he was employed on a contract basis and not in permanent employment; the Ombudsman held that he was mis-sold the payment protection policy. He considers it possible that many people in the construction industry may have paid premiums for such insurance for which, from the outset, they had no entitlement to benefit; this may be an industry wide problem and needs resolution.

Further information

Diarmuid Byrne (6318561), Gemma Normile (6318569) or Sylvia Costello (6318556)
Financial Services Ombudsman,
3rd Floor,
Lincoln House,
Lincoln Place,
Dublin 2.
Lo call 1890 88 20 90
Tel: 01-6620899
Fax: 01-6620890

Email address enquiries@financialombudsman.ie
Website address www.financialombudsman.ie