Press Release - 12 November 2008

Address on 12 November 2008 by Financial Services Ombudsman, Joe Meade to the Joint III/LIA/ACOI/IBA Graduation Ceremony in University College Dublin

Graduates, Presidents and Chairpersons of awarding bodies, Chairperson of the QFA Board and Guests.

It was a real delight to present you with your diplomas and certificates today and I congratulate all of you for coming through the courses of study so successfully. Naturally I am pleased that two of my own staff got parchments from me today. No doubt some of you will now go on to do the Bachelor of Financial Services Degree Programme for which today’s certificates and diplomas may entitle you to exemptions.

I must compliment the Insurance Institute of Ireland, the Association of Compliance Officers in Ireland, the Irish Brokers Association and the LIA for providing these courses. They aim to ensure that people who operate in the financial services industry have the qualifications required to assist them in operating to the highest ethical and professional standards.

The numbers graduating today and in the recent past is testament not alone to the success of these courses but the efforts being made by these educational bodies to ensure that they are relevant to current needs and expectations of everyone. Naturally I pay tribute and thanks to your families, partners and others who have had to endure your absences over the years on studies and revision. Without their support you would not have achieved so much. I expressly thank and compliment those employers who facilitated students with study leave. Being in UCD this evening brings back happy personal memories as I was a night student here from 1970 to 1974. Indeed I understand full well the pressures of doing a course in your spare time.

Irrespective of whether it is a requirement of the Financial Regulator to have minimum competencies, these courses would have to be provided anyway by the industry as indeed they were over the last 13 years. The fact that so many of you studied for your exams and attended course tutorials in your spare time is even more reassuring to me as Ombudsman. It is also a truism that in any walk of life acquiring knowledge and keeping up to date with new developments is necessary for the best performance of one’s tasks. This is why these certificate and diploma courses are so vitally important to the financial services sector. However, no matter how well qualified anybody is, it is how you exercise your functions that is important. In that regard, common sense is always a necessary part of any business operation and flexibility must also be there to deal with particular circumstances in an even handed manner.

You are all conscious of the efforts that have been made by me as Ombudsman, by the Financial Regulator and the industry over the last few years to ensure that consumers are treated in a fair, transparent and impartial manner. Accordingly it can be taken for granted that in the next year or two if any complaints are received by me where the sale of products have been undertaken by people who do not have the necessary competencies or are not grandfathered then that can be a good ground for upholding a complaint and awarding compensation. The era for catching up is almost over.

As regards my role as Financial Services Ombudsman I am a statutory officer though not a consumer advocate or a consumer champion. Instead I am an independent and impartial arbiter of unresolved financial disputes. However my actions to date have caused significant improvements to be effected in the industry, I have made major awards of compensation in individual instances while other consumers also got major refunds when a systemic problem arose.

I am dealing with people as are institutions. That is not an easy task on occasions I can assure you all. Naturally you cannot satisfy all of the people all of the time but you strive to have a happy customer as that cannot but be good for business. In an industry where large volumes of transactions take place, where complex products are sold, where investments are falling and where institutions are dealing with human beings, it would be abnormal if some complaints could not be resolved without assistance from me.

Financial Service Providers will, and do make mistakes. You graduates here today have a valuable and important role to play in trying to reach a settlement with your customer who has a complaint to make or has made one. Issues not resolved are referred to me and while it must be acknowledged that I only receive a small percentage of complaints relative to the total number of financial transactions undertaken, how these are handled by the Providers is what ultimately matters.

That said I have received over 16,500 complaints since April 2005 and indeed this year alone my workload of 5,000 complaints has increased by over 30%. Perhaps it is an indication of the present difficult times but I consider it more as a vindication of the changed regulatory and consumer protection environment for financial services put in place by the Government since 2000. The numbers of complaints to and resolved by my office is growing consistently each year since my inception in April 2005. Both consumers and Financial Service Providers are satisfied that my office provides an impartial, independent and cost-free dispute resolution service. The co-operation between the Financial Regulator and me as Ombudsman will continue to be crucial going forward in achieving the best possible outcome for consumers. While each Office have different roles, both are directed at achieving the best environment for consumers to be fairly treated.

Needless to say I do not uphold every complaint, only about 60% are resolved to the consumers’ satisfaction. I also publish Case Studies generally every six months to enlighten everyone as to what type of cases I deal with and what lessons can be learned. This I consider should improve the financial services environment for everyone.

Now I want to emphasise that whether I uphold or reject a complaint or the size of the award I make is not what is important. Rather that the Complainant and the Financial Service Provider receive a fair and impartial Decision from me is what I am about. If either party is unhappy with my decision it has a statutory right of appeal to the High Court and to date only 20 appeals - 0.2%- have been made including 6 by financial providers. It would be unrealistic to expect that no appeals would be made but let me say publicly once more that I do not mind an appeal to the High Court nor do I consider whether an appeal might arise before I make my final decision. An appeal is in effect a statutory protection for both parties if they feel I have not made the right Decision. Naturally, I will defend my actions in the High Court and I do not regard it as the Ombudsman winning or the appellants winning. It is just part of the process and naturally I learn from judgments delivered. Incidentally only two judgments have found against me. In carrying out my quasi judicial role I have to be conscious of any judgments given by the High Court to date. That is why I revised my procedures for dealing with complaints last August but that particular judgment is under appeal to the Supreme Court by me.

Let me emphasise that the era when financial institutions could take advantage of anyone, but especially of the elderly and disadvantaged, and also not disclose conflicts of interest is over as far as I am concerned. I will not hesitate to award compensation and publicise such nefarious actions. However I know and welcome the fact that your industry is making strenuous efforts to prevent such abuses happening in the future but even one to arise is alas one too many.

Finally all the regulation in the world is of little use to the individual consumer if it cannot have access to a cost free system of redress outside of the Courts so as to ventilate the alleged wrong done and have it remedied in a reasonably short time frame. My office in its short three and a half years existence is able to provide, has provided and will continue to provide such a system in a cost-effective, impartial and efficient manner. Your graduation today will hopefully reduce my bulging workload.

Again may I congratulate all graduates, your employers and your educational bodies? I now hope you and your guests have an enjoyable evening.

Thank you.