The FSO should be given the power to deal with systemic issues

Brendan Burgess

Brendan Burgess

Founder
Messages
54,774
I would like to see the FSO given the power to deal with complaints of a systemic nature.

Take the ptsb case as an example.
Borrowers on tracker mortgages who fixed the rate for a set period were entitled to their tracker back at the end of that period.
If they broke out of their fixed rate early, ptsb claimed that they lost their right to a tracker mortgage.
A borrower complained that he was entitled to the get the tracker rate back.
The Ombudsman upheld that complaint.

The Ombudsman has 80 similar complaints. Under the current legislation, he must hear every complaint separately from scratch. This causes a number of problems
1) It's a huge drag on the resources of the Ombudsman - going through the detailed work on 80 separate cases.
2) It's a huge cost for the complainants. Each of them must devote time, and in some cases money for professional advice, to pursue their claim
3) It creates a problem of inconsistency. Even since the Ombudsman upheld the ptsb complaint, another staff member in the Ombudsman flatly rejected an identical complaint.
4) Apparently 2,000 people in total are affected by this issue, but the vast majority are not aware of it.

I suggest that where the Ombudsman receives a number of complaints about the same issue relating the same financial institution, he should

1) Devote considerable resources to the complaint. It may be worth bringing in the Financial Institution and a few sample clients into an oral hearing and maybe mediation. They might even get professional representation, so that all the issues are teased out.
2) Publish his finding on the issue and name the institution involved whether he upholds or rejects the complaint
3) He should publish the criteria for upholding complaints and the criteria for rejecting complaints
4) Where he upholds a complaint which reflects a systemic issue, he should have the power to direct the financial institution to apply the solution to all customers affected by that issue.
 
Last edited:
The current system where the Central Bank deals with systemic complaints is not working.

The CB interprets Section 33AK , the confidentiality clause, in too legalistic a fashion. To the best of my knowledge, they have never used subsection (5)(af) which allows them to disclose information when it is necessary to protect consumers

When the Ombudsman brings a systemic issue to the attention of the Central Bank, the CB says "Thank you very much" and may or may not getsback to the Ombudsman. So the Ombudsman does not know if the CB has taken any action on the matter or not.

We would not know about the CB enforcement action on ptsb if it were not for ptsb making a statement about it.

Section 33AK, subsection (5) ... the Bank may disclose confidential information—
(af) if the Bank is satisfied that the disclosure is necessary to protect consumers of relevant financial services or to safeguard the interests of the Bank,
 
Brendan the CB have another one of their famous MOU with the FSO to discuss systemic problems

I specifically asked FSO to invoke it so they could learn of regulatory breaches that would normally be witheld by CB claiming professional secrecy under section 33AK

Flac did big report on consumer protection last year and FSO. ..they made a big point in highlighting your concern and especially that the conduit of information between FSO and CB was too informal

Its long but worth a read as it gives excellent overview of deficiency in consumer protection architecture in Ireland
 
I don't know, I actually think they have sufficent powers its just their policy, procedure and implementation is awry. Thats a cultural problem rather than legislative defficency,

Certainly by publishing some generic decision it will benefit themselves as financial providers would gain greater insight into their decision making process.
 
You must log in or register to reply here.
Back
Top