There are some cautionary tales for financial institutions and customers alike in the annual report of the Ombudsman for Credit Institutions. The Ombudsman, Mr Gerry Murphy, is an independent arbitrator appointed to rule on disputes between banks, building societies and their customers. The Ombudsman's services are free. In one case example cited, a man who obtained a credit card in 1995 with a credit limit of £700 claimed that the credit limit had been increased without his knowledge or consent to £4,250 (€5,396).
His wife had a second card on the same account and he claimed that she had fully used up all the increased credit facility without his knowledge. In response to the Ombudsman's inquiries, the credit institution stated that it had increased the credit limit six times in four years based on the card expenditure experience and that the minimum payment per month was always paid.
The institution was able to point out that the credit limit was written clearly on each monthly statement and that the complainant had been written to each time the limit was raised, informing him and giving him the option of retaining his previous credit limit. The Ombudsman rejected the complaint, pointing out that a customer is not compelled to have a credit card or to use it if he has one, and a customer must accept responsibility for the expenditure he incurs or allows to be incurred on his card. In another case, a couple who fell into arrears on a loan account had a judgment registered against them by the loan provider. The fact of this judgment was duly recorded on the Irish Credit Bureau records.
The complainants subsequently repaid the amount in full but the record on the Bureau had never been amended to reflect this and the customers' credit rating was adversely affected for two and a half years. When the complainants contacted the lender they were, in their own words, sent from Billy to Jack in their efforts to have the matter sorted out. The Ombudsman on investigation found that the loan provider had been negligent in that it allowed a period of two years to elapse after the customers had discharged the judgment in full before it lodged the Satisfaction Piece in the High Court. The Ombudsman awarded £2,000 compensation.
The Ombudsman considers all kinds of complaints from customers of financial institutions arising from the provision of services. On receiving a complaint, the Ombudsman reviews it to ascertain whether it comes within his terms of reference and also to see whether there is a prima facie case for the institution to answer. If there appears to be a case, the Ombudsman directs the complaint back to a designated person at the credit institution concerned to see if the matter can be resolved through agreed internal complaints procedures. If the complaint is not resolved to the customer's satisfaction in this way, then the case goes back to the Ombudsman, who carries out a full investigation and makes a ruling that is binding on the institution but not on the customer.
The Ombudsman can award up to £30,000 in any particular case or can direct a credit institution to take other steps that will do justice in the case. In the 12 months to the end of September last year, the Ombudsman received 1,203 complaints. Most of these were settled through the internal complaints procedure of the institution concerned. However, 519 cases were not settled in this way and required a full investigation and ruling by the Ombudsman. The complaint was upheld in almost half of these cases.
