Michael Kitt (Galway East, Fianna Fail)

I congratulate Deputy Michael McGrath on bringing forward this Bill and welcome that the Minister for Finance does not intend to oppose it. This debate is a good example of co-operation in this House. Perhaps it is part of the reform to which Deputy McNamara referred. I join Deputy Calleary in commending the former Financial Services Ombudsman, Joe Meade, who requested legislation that would give him the option of publicly naming an institution which acted wrongly. This recommendation has been taken up by the current Ombudsman, Mr. Bill Prasifka, who also supports the Bill.

Deputy Michael McGrath has made protecting consumers' rights one of his main missions as spokesperson on finance. Consumer rights have been abused and people have made complaints across a range of areas, including banking, insurance and investment. In recent years, the financial services sector has been strongly criticised and when confidence is lacking in the financial sector, there is an impact on the way people deal with their finances. The Minister of State at the Department of Enterprise, Jobs and Innovation, Deputy Perry, gave a detailed response to a question I raised with him yesterday on the issue of crime. People are becoming less likely to put their money into financial institutions and many elderly people are keeping money in their houses, which has led to house burglaries.

Last Monday, I attended a meeting of the joint policing committee in County Galway along with other public representatives, community leaders and gardaí. It was encouraging to hear that successful developments have been made in regard to the drugs culture in Galway. There has been a reduction in crime in many areas, such as personal assaults and property damage, but the burglary rate increased by 18% in rural areas of County Galway over the first two months of 2012. I am concerned by the fact that 846 incidents occurred over a two month period. Many of these burglaries were related to rumours that people are keeping money in their houses. In some instances, mattresses and pillows were ripped open in the search for cash. This is a sign of the decrease in confidence in the financial sector. The Garda advise people to keep their savings in financial institutions. Let us hope the institutions themselves do not break that trust.

Health insurance premiums have increased significantly in recent times. In February, the VHI increased its prices by an average of 9% and the price of its most popular plan increased by approximately €200. VHI will argue that it is losing 6,000 customers every month but the question arises of what insurance companies provide to their customers. Many of the plans aimed at older people have been downgraded. The insurance premium for one of my constituents increased from €888 to €1,051 per annum, an increase of 18%. That is a disappointing development.

Deputy Michael McGrath cited an article in the Irish Examiner about the sale of payment protection insurance to customers who could not avail of it. An investigation by the Central Bank's director of consumer protection uncovered widespread abuse across seven separate financial institutions. There has been a steady increase in complaints about the banking, insurance and investment sectors. This is why the Financial Ombudsman wants legislation to be put in place. The option should be available to name names because a culture change is needed in our banks. The saying, prevention is better than cure, is true in this instance because the Bill will work as a preventative measure.

I regularly receive complaints about managed funds. People invest in managed funds and incur penalties when they try to withdraw their money. They were not told how their investments work. I welcome that the Financial Ombudsman will be able to find in favour of people in that situation. Over the years people took out insurance without knowing what it was for. People were advised to take out insurance policies when the baby was born, when they got a job and even when they retired. They were used and abused because sometimes the lump sum on retirement went into the wrong type of policy. This practice has continued for too long. I often wonder why banks are involved in insurance in the first place. They appear to make loan approval conditional on taking out insurance but other companies are able to explain clearly to their customers what their entitlements are and how their funds are managed. One should not need to face penalties in withdrawing money from an investment. It is not always the case that insurance policies offer a mechanism for saving.

The Bill address issues in respect of banking, insurance and investment and should give people more certainty when they make investments. They can learn about how their funds are being managed and how to avoid penalties when they withdraw their money. The Financial Services Ombudsman has done great work in the past and I hope this Bill will become law at the earliest opportunity. People who have dealt with insurance providers in the past have been used and abused. I hope that does not happen again.

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