Press Release - 22 April 2008

Financial Ombudsman publishes his 2007 Annual Report

In his Annual Report for 2007 published today Financial Services Ombudsman Joe Meade indicates that

• Over 13,000 complaints received since the office was established on 1 April 2005 including 4,374 received in 2007, an increase of 15% over 2006. So far this year 1,600 complaints received – a 17% increase. 4,534 cases were concluded in 2007 after review or investigation with 59% resolved in complainants' favour ; no backlog in clearing complaints
• 13 decisions appealed to the High Court since April 2005 while another one was subject to judicial review - just 0.17% of cases decided on. To date only one decision was overturned on appeal, Quinn Direct - an interpretation by the Courts of the extent of Ombudsman's powers but it has not impacted adversely on his role
• Faulty computer systems led to underpayment of insurance policies- Ombudsman requested and got a review of other cases
• Arrears of €21,000 paid with continuing monthly benefit of €1,400 after Ombudsman's decision on what being ‘blind' should mean under an income protection policy
• Travel insurance - seeking invoices for lost clothes is unreasonable
• Sales of inappropriate investment products to the elderly is a recurring issue though institutions feel it is not systemic
• Group permanent health insurance policies - extent of cover not fully explained when sold in 1990s
• Conflicts of interest not being disclosed in sales of investment properties is unacceptable
• Increased premiums following insurance policy reviews are not understood; financial providers may need to retain recordings of phone sales while material submitted to him is not available under FOI.

Following the 2006 High Court settlement in favour of the Ombudsman in the judicial review proceedings taken by the Irish Nationwide Building Society full refunds, a seven figure sum in total, were made to all other affected customers. This follows a ‘look back' exercise, undertaken at the Ombudsman's request and under the Financial Regulator's supervision.

The Ombudsman also had to take Court action to ensure that a small number of brokers paid up the statutory levy of €125 to meet his Office's running costs- €3.6m -while 10,400 phone calls were received and 70,000 visits were made to the website.

Significant decisions published

The report also includes summaries of decisions already published during 2007 including:
• Over €200,000 awarded to a former professional Rugby player
• Following the sale of farm for over €1.3m an 86 year old bachelor was advised to invest €850,000 in two 4 and 6 year fixed term bonds; €350,000 was retained in a demand deposit account with a further €150,000 in a current account –€50,000 shortfall made good
• Mortgage Brokers giving investment property advice needs clarity and less confusion -€116,000 awarded in five instances
• Unsuitable €10,000 Investment sold to an unemployed single mother; sales practices of Insurance Company questioned - €10,000 refund
• Repatriation claim submitted by the parents of a deceased tourist was handled in an insensitive manner by Insurance Company - stg.£4,500 awarded
• Medical submissions by Insurance Company not accepted and Specified Illness cover award of €165,000 follows
• ATM card cash withdrawals of large sums across Bank counters need review to prevent fraud
• Mis-selling of Insurance Investment Fund- €10,000 award as management misled its own sales team
• Phone recordings access help Ombudsman's work; awards of €310,000 and €35,000 arose but a complaint against a stockbroker was rejected
• Relationship breakup can significantly affect life assurance policies
• Payment Protection Policies for construction industry workers need review
• Injured carpenter gets €10,000 award following ‘cold call' insurance policy sale
• Death Benefit Claim of €800,000 not upheld - non disclosure of medical condition
• Disposal of shares by stockbroker- conflict of interest complaint not upheld.

Download the complete Report in PDF Format - English / Irish

Further information

Diarmuid Byrne (6318561), Conor Cashman (6318575) or Sylvia Costello (6318556)

Financial Services Ombudsman,
3rd Floor,
Lincoln House,
Lincoln Place, Dublin 2.
Lo call 1890 88 20 90

Telephone: 01-6620899
Fax: 01-6620890

Email address: enquiries@financialombudsman.ie

Website address www.financialombudsman.ie

Note for editors

As an independent statutory office-established on 1 April 2005- the Financial Services Ombudsman ensures that unresolved complaints from customers of financial service providers are investigated, mediated and adjudicated on fairly. He can also make compensation awards up to €250,000 which are binding on both parties subject only to appeal to the High Court. His office is funded by a statutory levy on all financial service providers.