Complaints about banks, insurance companies and other financial institutions have reached record levels, with a one-third increase in complaints to the Financial Services Ombudsman.
Some 7,150 complaints were made to the ombudsman, Joe Meade, in the year to November, compared to 5,350 in the preceding year.
Over €1.4 million was repaid by financial institutions to consumers as a result of the latest decisions issued by Mr Meade. Once again, instances of mistreatment and bad advice given to elderly customers feature highly in the 30 case studies published this morning.
In one case, the ombudsman ordered the maximum €250,000 compensation be paid to a retired farmer by a bank which was found to have dealt with his investment in a “cavalier” manner.
The farmer invested €2 million from the proceeds of a land sale in two bond which he understood to be capital guaranteed. Although the bonds proceeded to drop in value to €1.6 million, he was told he had nothing to worry about because the fund was guaranteed.
Eventually, the bank admitted it had given wrong advice and the bonds were cashed in at a loss of €540,000.
Mr Meade ruled that the bank confused and even misled its customer. In making the award, he ordered the bank to make a formal written apology for “belittling” remarks made by a senior official who told the farmer he shouldn’t be complaining “having done so well out of the sale of your land”.
In a second case, the ombudsman ordered the full refund of a €410,000 property bond sold to a 68-year-old separated woman with no pension. In six months, the value of the bond had fallen to €186,000 and the woman was told there would be a €10,000 penalty if it were to be encashed.
Investigating her case, the ombudsman found a series of errors in the “fact-find” drawn up by bank officials when the bond was purchased. She was identified as a widow and non-smoker, when she was separated and a smoker and her home and contents were valued at €1.1 million when they were worth only €150,000.
Mr Meade concluded that the procedure followed by the bank was hurried and haphazard and said it did not take account of her age and the concerns that would normally apply to a person working part-time and about to retire with no pension.
He ruled that the bank had failed in its duty of care and directed that it return the €410,000 invested in the bond to her.
Since his office was set up in 2005, Mr Meade has handled 25,000 complaints and at least €60 million has been made good to consumers as a result of his investigations.
Mr Meade, who retires at the end of the month, says his decisions have had a knock-on effect on the wider financial services industry and has helped to get other matters resolved.
