The Financial Services Ombudsman received 4,374 complaints last year - and 60% were resolved in favour of consumers, writes Paul Cullen

The Financial Services Ombudsman received a record number of complaints last year, with up to 12 new complaints being made by consumers every day.

The 4,374 complaints received by the ombudsman, Joe Meade, represented a 15 per cent increase on the previous year. Insurance companies accounted for over 2,000 of the complaints and banks for almost 1,600.

Almost 60 per cent of complaints were resolved in favour of consumers, Mr Meade said yesterday in a review of his work last year. The main areas of complaint against credit institutions were account transactions, mortgages and credit card disputes, while cars, travel, and household buildings were the main complaint areas involving insurance companies.

Maladministration, unfair treatment and breach of contract were the main types of complaint against credit institutions, while customer grievances with insurance companies centred on repudiation of claims, claims handling issues and customer care issues.

The ombudsman has the power to investigate complaints made by customers about financial service providers and to make compensation awards up to €250,000. His awards are binding on both parties, though they can be appealed to the High Court.

The ombudsman yesterday published details of a number of significant decisions made in the second half of last year. In keeping with his practice, Mr Meade did not identify the parties involved.

Some 15 of the 20 case histories published were upheld, and compensation awards totalling more than €173,000 were ordered. The remaining five complaints were rejected.

Two awards totalling €55,000 were made to people who complained about the poor quality of investment advice given on foreign properties, prompting Mr Meade to express concern at the overseas property investment advice being proffered by some financial advisers.

Citing another case study, Mr Meade said that when disputes arose over contracts carried out online or over the phone, he would be disposed to finding for customers where financial services companies had no concrete proof of the transaction.

In a property-related case, Mr Meade said an investor had sought advice from a company offering investment advice and was advised to purchase a property using a deposit of €70,000.

The adviser said it would be possible to sell the property for a profit. However, this did not happen and the investor complained to the ombudsman that the advice was flawed and the adviser had a conflict of interest as he was also earning a commission as an estate agent from the developer, a fact that was not disclosed to the investor.

The ombudsman found that the adviser was using a business card which on one side showed he was trading as a financial service provider and on the reverse, as an estate agent. The adviser had a "clear conflict of interest" and could not offer independent investment advice on that property, he ruled.

Although the complainant claimed to have lost €50,000, the ombudsman found that he was negligent in proceeding with the investment. The ombudsman made a finding of €25,000 against the adviser. A second payment of €30,000 was made against another property adviser.