It won’t come as much of a surprise to learn that the number of complaints lodged with the financial ombudsman jumped sharply last year, with poor levels of customer service and a surge in scams behind much of the increase.
According to a recent report from the Financial Services and Pensions Ombudsman (FSPO) a total of 5,907 complaints were concluded last year, up 14 per cent on the 2023.
Concluded does not mean resolved in the favour of consumers and while individuals and small businesses benefited to the tune of just under €5.8 million as a result of the processes the FSPO oversaw, others found rulings going against them.
For instance, the ombudsman issued 127 tracker mortgage interest rate related legally binding decisions in 2024, with 120 complaints not upheld.
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As part of its report, the FSPO publishes some case studies - with names changed - to illustrate the work it does and they are illuminating for anyone considering lodging a complaint in the future.
Here are just some of them.
Mortgage complaints
Elliot drew down a mortgage loan with his bank in 2004 for just over €232,000 on a fixed interest rate of 2.75 per cent for 12 months with a standard variable interest rate to apply after that.
Elliot reckoned the bank fell short of its responsibilities and did not carry out a proper assessment of his affordability to ensure that an appropriate loan was offered to him and he said the level of due diligence carried out by the bank was unreasonable, improper and lacked consideration.
The bank contested this view, submitting they were satisfied that they correctly assessed Elliot’s mortgage application based on his net disposable income. The complaint was rejected.
Imogen and Liana held a mortgage loan with a bank of €300,000 which operated on a tracker interest rate of European Central Bank (ECB) + 0.60 per cent. In 2015, they experienced financial difficulties and decided to sell the mortgaged property. Imogen and Liana stated that the bank was incorrect in not allowing them to retain the tracker interest rate of ECB + 0.60 per cent that had applied to their original mortgage loan when they sold the property and purchased a new property. The complaint was rejected with the ombudsman noting that the original loan offer was for the specific property named in the loan agreement.
Fintan held a mortgage loan with a bank for €242,000 repayable over a term of 35 years commencing on a fixed interest rate. Fintan stated that his mortgage documentation provided that his mortgage loan would change to a “variable base rate” at the end of the fixed interest rate period.
Fintan was of the view that the variable base rate equated to a tracker rate of interest. This was due to the bank’s tracker rate and variable rate products operating at the same rate up until mid-2008. He believed that when the fixed interest rate period expired in 2012, the bank should have applied a tracker interest rate to his mortgage loan account instead of a standard variable rate of interest.
The ombudsman noted that while the bank’s tracker rate and variable base rate reflected similar rates during certain periods, the loan offer made no reference to either rate being linked in any way. On the basis of all the evidence the complaint was rejected.
Insurance complaints
Other stories were about insurance products.
Dermot purchased travel insurance when buying airline tickets for him and his family. Later, due to illness, some of the party could not travel, which led to the cancellation of the holiday. Dermot wanted to claim a refund for the cancelled holiday from his insurance company. Having contacted the airline, Dermot was informed he needed to submit a claim through an online portal.
Dermot attempted to submit the claim but was not making any progress and was frustrated by the lack of engagement from the insurance company. He submitted a complaint to the FSPO and it emerged that he had been contacting the wrong company, but nobody had explained this to him when he was seeking updates on his claim. The FSPO contacted the insurer of the policy and asked it to review the complaint. The claim was ultimately processed.
Karl booked a holiday for himself and his girlfriend. The holiday was a Christmas present for her. Karl also took out a travel insurance policy in his own name around the same time. His girlfriend was not named on the policy. Shortly before they were due to go on the holiday, Karl fell ill. He was certified by his doctor as unfit to travel and the holiday was cancelled.
After cancelling, Karl made a claim on his policy for the full cost of the holiday. He gave the insurance company a copy of his credit card statement showing that he had paid the full cost of the holiday for his girlfriend and himself.
The insurer paid Karl’s claim for half of the cost of the holiday. The insurer said that payment of half of the total cost of the holiday was in line with the policy as only one of the two people travelling was named on it. Karl complained that the policy stated that it would cover the policyholder’s costs.
Karl believed he had proven that he had paid for the full cost of the holiday and, therefore, should have been paid in full by the insurance company. As they could not resolve their differences through the insurance company’s formal complaints process, Karl made a complaint to the FSPO. The complaint was not resolved during mediation and was referred for formal investigation in the FSPO.
The insurer responded to the summary of complaint issued by the FSPO saying that it had reviewed the complaint again and as a result, its stance had changed since the complaint was raised. The insurance company offered to pay the remainder of the claim costs in full and final settlement. This was accepted by Karl and the complaint was closed.
Declan had a credit card which he always paid on time until he stopped using it and did not think there was a problem as the balance was zero. Declan moved house and didn’t think he needed to change his address with the bank as he was not using it anymore.
As Declan had simply stopped using his credit card rather than formally closing it, the bank was obliged to apply the annual €30 government levy to the account. As Declan had not changed his address, he did not see the credit card statements and he did not know there was money due.
When the €30 was not paid it gathered interest and late fees, and the card fell into arrears of €127.59. The credit card company then put a block on the card. The Credit Reporting Act obliges banks to report to the Central Credit Register (CCR) on lending over €500. Declan’s lending was not over €500 but his credit limit on his card was over €500 which brought it into the reporting net.
When Declan applied for credit elsewhere, he was declined as his Central Credit Register report showed a cancelled credit card with an unpaid balance of €127.59. Once he knew of the debt, he paid it immediately.
However, he discovered that the CCR report, with the unpaid balance, would be visible to any future lenders for five years from the day he paid it off.
He complained to his bank for not ringing him in time for him to pay the debt. His bank told him that it does not ring customers when the debt is below €300. It said that in order to stop paying the annual government levy it is essential to actually close the card. In terms of the poor credit report, the bank said its report to the CCR must be factual. It said that it can only change a credit report if it is inaccurate, and that Declan’s card had an unpaid debt and was cancelled. Declan accepted the explanation and closed his complaint.
Scams
And then there were the scams.
Simone and her friends hopped into a taxi while away on holiday. They noticed that the meter seemed to be running very fast while the taxi was stuck in traffic. They decided to walk.
The taxi driver told them the fare was €20 but covered the screen when Simone put in her card and pin. Later that day Simone noticed that €2,000 had been taken from her account. She reported this to her bank.
Simone’s bank raised a fraud chargeback in an attempt to get the funds returned. However, as Simone had approved the payment with her pin, the fraud chargeback was not allowed under the rules of her card.
Another option offered by Simone’s bank was to initiate a dispute chargeback which is available when a service is not delivered or is not as described. However, Simone did not get a receipt from the taxi driver, and a receipt was required under the rules of Simone’s card, in order to start a dispute chargeback. Having heard these explanations, Simone decided to close her complaint
Alan had a current account with his credit union and in 2022, he activated a payment service on his mobile phone by clicking on a link. The following day, Alan noticed 13 transactions on his account totalling €1,280 which he said he did not authorise.
These transactions had taken place during the previous night and appeared as payments to an entity in another country. Alan said that he did not receive any alerts or notifications from his credit union in relation to these transactions. He contacted the credit union both over the telephone and in-person at his local branch and arranged for his card on the account to be cancelled and a replacement card issued.
Alan said the branch staff informed him that the amounts in dispute had not left his account but that if they were to, they would be refunded to him. Alan contacted the credit union again after he discovered the amounts in dispute had left his account. His request for a refund was declined in a final response letter issued by the credit union, which asserted that Alan had shared his one time passcode with a third party, which allowed the third party to make the fraudulent payments on his account. Alan was not happy with this outcome and made a complaint to the FSPO.
As the complaint was not resolved in mediation, the FSPO began the formal investigation process by sending a summary of complaint to the credit union. This included copies of all communications between Alan and the credit union which, in Alan’s view, supported his argument that he should be refunded the amount of the transactions in dispute. Following the issue of the summary of complaint, the credit union contacted the FSPO to make a settlement proposal.
It acknowledged that the information given to Alan by the credit union’s outsourced customer service provider had raised his hopes of a refund, and so the credit union offered Alan a full refund of the amount in dispute, which he accepted.
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