Complaints by consumers about financial institutions grew by over one-third last year, according to the Financial Services Ombudsman (FSO).
Complaints about investment issues alone more than doubled as consumers increasingly feel the pinch, the FSO's figures show.
Last year, the ombudsman received 5,950 complaints, an increase of 36 per cent on 2007; 2,620 of these were against credit institutions such as banks and building societies and 3,330 concerned insurance companies.
The ombudsman, Joe Meade, says the upward trend in complaints is likely to continue, with 1,600 complaints filed in the last quarter of 2008 alone.
Today he published 11 significant findings made in the banking and investment in the second half of 2008, nine of which were upheld and two rejected.
The largest award was for €500,000 to a credit union which made a "worthless" €1 million investment in a "wrap-around" insurance bond recommended by its broker.
The ombudsman's investigation included an oral hearing because of a conflict of evidence between the credit union and the broker. He ruled that the broker had breached his duty of care by failing to advise the credit union of the risk of total loss of capital on the investment and making an inadequate presentation of the product.
However, he accepted the broker had acted in good faith and was not negligent. Mr Meade said he wasn't impressed by the actions of the broker or the credit union, the members of whose investment committee had signed up for the product blind, without reading the brochure.
He ordered the broker to refund half the value of the bond and all fees and commissions. The credit union is appealing his finding to the High Court.
In another case involving a failed "wrap-around" investment bond, the ombudsman directed a broker to repay €70,000 for bad advice on a €110,000 investment. He found that the broker had totally understated the risk involved. The broker is appealing this decision to the High Court.
Mr Meade rejected the case made by another consumer who lost €1 million on a failed investment bond because, he ruled, he was aware that he had signed up to an element of risk and even the risk of total loss.
In other decisions, the ombudsman ordered the return of €6,100 to a pensioner after €7,500 was stolen from her account; the payment of €47,000 in compensation and €20,000 in legal fees to complainants after a bank lost the deeds to their house; and a refund of €74,000 to a solicitor who was defrauded when a year-old cheque for €111,000 was cashed and paid out by his bank.
Mr Meade said there were a growing number of complaints about disputed transactions on credit cards occurring when people are in nightclubs, particularly overseas. Many of these are rejected.
In the current example, he ordered the repayment of €1,850 to a reveller after €4,300 in credit and debit card transactions occurred while he was in a lapdancing club in Brussels in the early hours of the morning. The man claimed he was a victim of credit card fraud, but his bank suggested he had negligently revealed his Pin numbers himself.
Since the FSO started in 2005, it has received over 17,400 complaints, of which 15,100 have been resolved. Over 60 per cent of cases are resolved in favour of the customer.
