Press Release - 03 July 2008

Forced sale of insurance products, improper third party disclosure by bank involving elderly/frail siblings, husband signing what purported to be wife’s signature, bogus non resident account, switch of medical cover, ISTC bonds, travel and car insurance and delay in carrying out insurance policies reviews.

Financial Services Ombudsman, Joe Meade, today on his website
http://www.financialombudsman.ie/case-studies/
gives details of 20 significant decisions made in the January/June 2008 period -15 upheld and 5 rejected.

(a) Complaints upheld

1. Insurance agent drove a vulnerable farmer living alone to an ATM cash point to secure sale of unsuitable health policies while another agent stayed behind in the house - action condemned, premiums of €1,520 returned and €1,500 compensation

2. Naive bank official facilitated an ‘interfering neighbour’ to improperly deal with and change the account status of elderly siblings joint deposit account of €106,000 - the 85 year old was in hospital and the 79 year old was deaf; €1,200 compensation

3. Husband, aged 69, met with the Bank, invested €100,000 in a fund which then fell sharply in value to €68,000 and signed what purported to be his wife’s signature -€52,000 refunded by bank to wife by direction from Ombudsman

4. €50,000 award following delayed review of Unit Linked Whole of Life Policy for couple in their late 60s who had by then paid over €60,000 in premiums – increase from €780 to €2,000 in monthly premium sought; systemic problem also identified by Ombudsman in 1,800 other cases

5. Bank’s threatening letter debacle costs it €4,000 ; the bank’s systems were at fault

6. Bogus non resident account allegedly held by a member of the Gardai merits €2,000 compensation – building society did not really appreciate the gravity of its mistake

7. Accountant’s unnecessary delay in submitting financial accounts to Insurance Company had serious consequences for Claimant’s Income Protection claim- Ombudsman was able to get claim reopened

8. Loan protection insurance not extended to consolidated loan-bank directed to write off €17,000 of a €23,000 loan as original loan was protected

9. €7,500 awarded for ‘partly unsuitable’ investment advice

10. Switch of Medical Plans recommended by the Health Insurer resulted in no cover for cardiac treatment expenses; restoration to original Medical Plan, without a two year waiting period, directed by Ombudsman and €5,000 compensation

11. Lack of clarity as to what was covered under an insurance travel policy-€600 awarded for stolen lap top and a review of former claims follows

12. €15,000 award as Broker did not draw to the Complainant’s attention the possibility of increasing her disability cover

13. Lost property title deeds merits €3,500 compensation against bank

14. €8,000 awarded against credit union over loan insurance for a disabled person; bad customer service and unhelpful approach overall

15. Incomplete address on motor insurance company records had serious consequences for teenage driver after an accident- company had to meet accident damages

(b) Complaints not upheld

1. Take reasonable care while on holidays-stolen property claim was not credible

2. Cancelled cheque – detail furnished after enchashment had already happened

3. Motor Insurance dispute concerning notification of policy cancellation

4. Death certificate determined that personal accident travel insurance was not payable

5. Insurance Company not responsible for failure of car engine

(c) ISTC complaints

Some providers reached settlement terms with 10 ISTC investors, after they made complaints to the Ombudsman and where €1.5m was invested. He expresses serious concern about how the ISTC bonds were sold and their inappropriateness for elderly people. By 31 May he had received 25 complaints regarding €5.2m of ISTC bonds including sales of two such five year fixed term bonds of €475,000 to 2 people aged 81 and 94.

Overall some 2,700 complaints received so far this year - 30% increase

Further information:
Conor Cashman (6318575); Diarmuid Byrne (6318561); 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 enquiries@financialombudsman.ie
Website www.financialombudsman.ie

Note for media : 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 in an impartial and independent manner. He can in addition to rectifying matters make compensation awards up to €250,000 which are binding on both parties subject only to appeal to the High Court.