Letter from Bank of Ireland to Financial Ombudsman Bureau

 

A. General remarks

1. Bank of Ireland is in favour of the publication of more comprehensive information relating to customer complaints on the F80 website and in the FSO's annual report. The he proposals advanced in the FSO's recent consultation paper are therefore generally welcomed by Bank of Ireland.

2. Bank of Ireland believes that the greater availability of information will serve several useful public purposes, cot least in encouraging financial providers to develop their internal complaint processes to ensure that these arc robust, and responsive, to legitimate grievances that customers have in relation to financial products and services.

3. The measure will also encourage companies to pursue all available internal avenues for complaint resolution, in preference to reliance on the referral of complaints to the Financial Services Ombudsman.

4. This said, there are several factors to be considered in the implementation of the broad proposal, factors which will influence the efficacy or the proposals. Some of these factors are raised in the consultation document (a proposed de minimis reporting, threshold, for example), while others arise or, detailed examination of the proposal.

5. As a general principle, while Bank of behold believes that mere comprehensive reporting is required, the benefits to be gained from such reporting must not be outweighed by disproportionate costs in the production and collation of complaint information or supporting information, such as market share information. It will also be important to have consistent classification of complaints across die industry.

6. Given the undoubted media and wider public interest there will be in the information being published, it will also be important that the information published is verified, in tandem with the relevant financial providers to which the information relates, before the publication of any company-specific complaint information.

B. Specific comments on questions
Do you think it is appropriate to publish details, for each financial services provider, as to: total number of complaints, complaints upheld,  complaints upheld in part, total amount of compensation awarded? If not, why?

• Bank of Ireland has no objection to the publication of this information, provided that it is supplemented by information where a complaint is partly upheld, giving the proportion or the original claim which is admitted by the partial upholding a the complaint, or if this is not possible, slating that the complaint was only partly upheld. This will give a balanced view or complaints determined by the FSO. By including a complaint which is only fractionally upheld, as part of complainants' overall success rates, without giving a sense that it was only partly upheld, could give a very misleading view of a financial provider's failings, especially when relatively small, ex gratia, type payments are involved.
  

In the UK a cut-off of 30 complaints is used (i.e. information is not published if the financial services provider had less than 30 complaints and/or less than 30 complaints in a specific category). What level of de minimis number of complaints would you propose as being appropriate in Ireland and why?

• Bank of Ireland has concerns about any de minimis reporting, level being employed in Ireland. Firstly, the costs associated with reporting on complaints on a fully comprehensive basis are relatively small. Secondly, there is no clear reason to exempt a complaint concerning a financial provider with a small number of complaints. This could create a misleading impression, in consumers' minds, on the likelihood of a cause of complaint being encountered in a firm thus exempted from reporting. Thirdly, imposing any sort of de minimis threshold will probably leads to claims for 'marginal relief' as the reporting threshold is neared by a particular provider, or else will create ongoing debates on the appropriate de minimis level for reporting. it would bc better and simpler to report comprehensively, with no exemptions.

By way of example the F50 has suggested that the de minim is threshold could be set at a minimum number of findings upheld/partly upheld.  Do you think the de minimis threshold should apply to  the number of findings upheld/partly upheld or should it apply to the total number of complaints by financial services provider including those not upheld? If you think it should apply to the number of findings upheld/partly upheld only please give reasons why.

• See comments above relating to reporting thresholds.
• Bank of Ireland favours the publication of more detailed information relating to claims only putty upheld, to ensure that reportage is balanced and fair.

Should the FSO include details of each financial services provider's market share? If yes, can you please give details of how you would suggest the market share figure should be calculated and/or from where it could/should be sourced.

• Bank of Ireland agrees that it is useful to provide some context for complaint levels received by individual financial providers. A small number of complaints received about a financial provider with a relatively large market share is probably less of an instant concern, perhaps, than a large number of complaints concerning a financial provider with a small market share.
• The practical issue, however, is to come up with a suitable measure of a financial provider's standing in a market, without a very costly market share measurement and reporting exercise.
• There could also be competition law issues to do with the publication of such comparative market share information.
• An alternative may to adopt a simple coding system, indicating whether the provider has, for example, an insignificant, small, medium or large market share in the broad product category concerned.
• This coding system should be capable of being readily agreed with the providers by the FS0 and deployed comparatively easily and cost-effectively.

Similar to the PSO case studies currently the FOS in the UK does not appear to disclose the names of either the customer or the financial services provider in the case studies it publishes. The FS0 is now considering whether the name of the financial services provider should be disclosed in circumstances where there is a compelling public interest to do so. Would you agree with the FSO proposal to disclose the names of financial services providers where there is a compelling public interest to do so? If not, why?

• It would be probably be better to examine this proposal at a later date,  when the, revised complaint reporting structure has been satisfactorily bedded down.
• Generally, this issue would require careful evaluation, given provisions regarding the right to vindicate one's good name. It would also be important to develop clear guidelines on what constitutes a compelling public interes.

While the FRO is proposing to publish the information by financial services provider it hasn’t proposed to change the format in which information is published. The FSO currently publishes information across three general categories (Investment, Banking and Insurance) and within each general category the information is broken down by product type. Do you think the information could be provided in a more meaningful way? If yes, please provide details.

• Some modifications to current information categories may be helpful. It would be important to strike the right balance between further or different categorisation of complaints, the costs involved, and the usefulness of the additional insights and information for members of the public and financial services providers.
• When a complaint is referred to the FSO, it would probably be helpful to have the complaint classified at that stage, informing the provider concerned of the proposed classification. This will ensure a consistency of complaint classification across the industry.

Other matters

• A clear definition of how the FSO will record complaints is required - for example, a complaint from one complainant concerning or touching say five accounts- is this one complaint or five complaints? This could have a material impact on the numbers of complaints twitted.

ENDS