Disputes about loans and mortgages, alleged mistakes in bank and building society accounts and bad service accounted for most of the 1,033 complaints to the Ombudsman for the Credit Institutions in the year to the end of September. These issues accounted for 70 per cent of all complaints examined by Mr Gerry Murphy, according to the 1997 annual report of the ombudsman. But there were very few complaints about the operation of automated teller machines or about fees and charges.
At 1,033, the overall number of complaints was up from 966 in the previous year. Some 71 of the complaints received were outside the ombudsman's terms of reference, reducing the number of valid complaints to 962. The number of invalid complaints was down from 80 in the previous year.
Complaints about loans and mortgages accounted for 45 per cent of all complaints, while alleged mistakes in the operation of accounts were responsible for 28 per cent of complaints. Allegations of poor service accounted for 8 per cent of the total.
Complaints about the operation of ATM machines accounted for just 2.6 per cent of all complaints, despite the rapid growth in the number of transactions carried out on these machines. Mr Murphy said last night that, while the number of transactions on ATMs had increased from 50 million to 100 million between 1992 and 1997, the number of complaints to his office concerning them had fallen from 32 to 27.
Credit cards accounted for only 4.3 per cent of all complaints. Over the 1992 to 1997 period the number of credit card transactions had increased from 20 million to 40 million but the number of complaints had fallen from 48 in 1993 to 44 in 1997, Mr Murphy said. This low level of complaints augured well for the future development of electronic banking services, he said.
A feeling by customers that they were on the receiving end of some unfair treatment was the reason for 43 per cent of the complaints while mal-administration was the reason behind 19 per cent. Only 2 per cent of complaints related to alleged breaches of confidence.
When a complaint is received the ombudsman first assesses whether the case comes within his terms of reference. He then refers complaints to the formal internal complaints procedure of the bank or building society which is the subject of the complaint to see if the parties can reach agreement on the issue. Of the 962 valid complaints some 683, or 71 per cent, were settled at this stage. In his annual report, Mr Murphy said that the settlement of more than seven out of 10 of the complaints through the internal complaints procedures of the banks and building societies suggested that these internal procedures are working well.
The complainants in the 279 remaining cases were not satisfied with the outcome of this internal complaints process and sought rulings from the ombudsman. Some 31 cases were settled over the course of the ombudsman's investigations.
Of the remaining 248 cases, Mr Murphy upheld 101 complaints (40.7 per cent) and issued recommendations to resolve the disputes. Complaints were not upheld in 147 cases (59.3 per cent).
Mr Murphy received 58 complaints concerning disputes about the flotation of the former Irish Permanent Building Society. Most of the complaints were from people who did not qualify for free shares, particularly the second-named persons on joint accounts, where the first-named person was deceased. Legislation at the time said that only the first named person on an account qualified for free shares. That law has now been changed.
After six years of operation, an internal review of the Credit Institutions Ombudsman's Scheme was undertaken this year. The review assessed the level of awareness of the scheme among bank and building society customers. It found that 31 per cent of the account holders questioned were aware of the scheme without being prompted. Asked if they had ever heard of the Ombudsman for the Credit Institutions, some 61 per cent said they had. All but 6 per cent of these respondents knew what the service involved.
Mr Murphy said that all complaints to his office receive a written response within 48 hours. Where unresolved complaints were referred back to the ombudsman, it took an average of 118 days for a ruling.
The ombudsman scheme was set up by the credit institutions in 1990 as an avenue for customer complaint. It is run by a council which was instituted to guarantee the independence of the ombudsman and monitor the administration of the scheme. The council consists of four independent members, four industry members and independent chairman Mr Ronnie Delany.
The ombudsman's decisions are binding on the credit institutions involved and cannot be appealed. The banks and building societies are levied to pay the annual cost of running the scheme - £276,000 last year - in proportion to the size of their customer bases. The service is free to bank and building society customers.
