Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Tógfaidh mé deich nóiméad agus tógfaidh mo chomhghleacaithe anseo cúig nóiméad an duine. Gabhaim buíochas leis an Aire as an Bhille seo a chur i láthair. Bunaíodh an FSPO anseo agus chuaigh sé i mbun a chuid oibre in 2018.

The FSPO was established and began its operations in 2018. Its primary function is to receive, investigate and endeavour to resolve consumer complaints regarding the conduct of financial services and pension providers. Crucially, this is free of charge. The role of the ombudsman is so important. It is essential that the FSPO works as intended. I will return to that broader issue at the end of my contribution.

There are 20 sections in this legislation. I will discuss some of the key themes and provisions provided for in the Bill. As the Minister mentioned, one of the key purposes of the Bill is to ensure that the ombudsman can continue to carry out its functions in light of the Supreme Court ruling in what is called the Zalewski case. This case was concerned with the processes and procedures used by the WRC, when it adjudicates on employment-related disputes. The Supreme Court judgment found that the WRC's adjudication processes amounted to an administration of justice for the purposes of Article 34.1 of the Constitution with, therefore, ramifications for a number of issues, including the holding of public hearings. In response to that judgment, the WRC implemented a number of changes to its procedures and processes, with the Oireachtas adopting legislation in 2021 to address the deficiencies in the WRC's processes, as identified in that Supreme Court judgment. This has resulted in other bodies with quasi-judicial functions, such as the FSPO, also reviewing their processes and procedures.

This proposed legislation gives effect to the Zalewski case judgment to ensure that the FSPO can continue to carry out its functions in accordance with the Constitution. A number of sections in the legislation give effect to that. Section 13 seeks to clarify that the ombudsman has the power to require any witness to be examined or cross-examined under oath or affirmation, which was a key finding of that judgment. Section 56(4) of the 2017 Act currently requires the ombudsman to ensure that where oral hearings are deemed necessary, they are conducted in private. Section 16 of the proposed legislation amends this section of the 2017 Act to allow oral hearings to take place in public in certain circumstances. I am sure this provision will be discussed in detail on Committee Stage. It is of vital importance that legislative changes are made to ensure that the FSPO can continue to discharge its important duties. I look forward to discussing with the Minister on Committee Stage the provisions of the Supreme Court judgment and their implications as we deal with them in this legislation.

The legislation also concerns very important issues I raised during pre-legislative scrutiny, including the power of the FSPO to investigate a complaint against a financial services provider where it is not regulated by the Central Bank. Section 2(b) of the Bill clarifies that the FSPO can investigate complaints against entities that meet the definition of a financial service or pension provider at the time of the conduct complained of, even if it ceases to meet the definition before the complaint was made or the investigation concluded. This ensures that customers of financial service providers that have departed the Irish market, for example Ulster Bank or KBC, can continue to access the services and protections offered by the FSPO. That is a good thing. I welcome the provision set out in section 2 of the Bill.

There is, however, another very serious related issue, which I will raise. It is where a complaint is made against a financial service provider that currently falls under the definition of the 2017 Act, but did not at the time when the conduct complained of occurred. In the 2017 Act, a financial service provider is defined as a regulated financial service provider, whose business is subject to regulation by the Central Bank. Here we have a problem. As the Minister knows, approximately 80,000 mortgage loans are held by vulture funds. The Minister also knows that I and Sinn Féin argued strongly against the sale of these loans by retail banks to vulture funds and warned of the negative outcomes that would arise for consumers. We can all agree my concerns have proven to be well-placed. Fine Gael told us that these borrowers would lose no - none whatsoever - consumer protections following the sale of their mortgage loans to vulture funds. The Minister will agree that being able to avail of the services of the FSPO is a key consumer protection. I am aware, however, of individuals who have had their loans held by vulture funds, and sought to complain to the FSPO regarding the conduct of these funds, but have been told by the FSPO that they cannot be investigated. This is because at the time of the conduct being complained of these vulture funds were not regulated.

The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 came into effect on 8 July 2015, while the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 came into effect on 21 January 2019. Before July 2015, neither the vulture funds owning the loans or the firms servicing them were required to be regulated, so the FSPO cannot investigate conduct prior to this date with respect to either the fund or the credit servicing firm. Even after 2015, when the credit servicing firms were required to be regulated, the vulture funds owning the loans were not required to be regulated under the 2018 Act, which requires the vulture funds owning the loans to be regulated and which came into effect only in January 2019. Even still, many of these vulture funds did not even ask or seek authorisation until months later. As a result of all this, what we have now are thousands of mortgage holders with loans held by vulture funds who simply cannot make a complaint about the conduct of these funds where the conduct occurred prior to 2019 or, in many instances, even during 2019.

This is happening. It is a serious issue. The FSPO has made determinations on this issue and they are crystal clear. They are basic things people would expect to be able to make a complaint about, like the assessment of your standard financial statement, for example. If that happened before 2019 and if your loan is with a vulture fund, the FSPO is of no assistance to you. These are loans that were unfairly sold to vulture funds, which do not now have equal access to the Financial Service Pensions Ombudsman, despite all of the commitments we heard at the time. It does not appear to me that this Bill addresses the gap in legislation. I appeal to the Minister that he accommodate us to ensure this issue is dealt with. I would appreciate if he would clarify his position on the cases I have just outlined, and that the financial services ombudsman has no jurisdiction to investigate complaints into key decisions a fund should make, and which happened prior to 2019. I understand this gap is not being dealt with in this legislation and would welcome the Minister's views on the ability to close this gap on Committee Stage. I would be happy to work with him and with his Department to rectify this issue through amendments on Committee Stage to benefit consumers. This legislation does allow for the FSPO to investigate complaints that happened even when a regulated entity is no longer a regulated entity. However, the reverse does not happen and we need to address that urgently.

I turn to the general issue I mentioned at the beginning of my contribution, which is ensuring the FSPO works as intended. The Minister will be aware, because I have raised this at length many times, of the length of time it takes the FSPO to resolve complaints. It is the view of a number of financial advisers that the FSPO is no longer fit for purpose, with long delays in the adjudication and resolution of complaints. Indeed, some complainants are being told that it will take up to three years for a decision to be made about their complaint. It has been reported the ombudsman informed one consumer that the average time for the assignment of a complaint to an adjudication officer is between 12 and 15 months, with it then taking an average of another 12 to 18 months for a preliminary decision to be made. That is between two and three years from a complaint to a preliminary decision. We can all agree the FSPO is a crucial service that must work well for consumers. Financial advisers are warning the service has collapsed, which is of great concern and must be addressed. Under the directive of alternative consumer dispute resolution it states, "A properly functioning ... [alternative dispute resolution] entity should conclude online and offline dispute resolution proceedings expeditiously within a timeframe of 90 calendar days starting on the date on which the ADR entity has received the complete complaint file". I would welcome the Minister's views on the application of this directive, on the functions of the FSPO, and how they are being adhered to.

I have separately raised with the Minister the option of introducing an independent assessor to the FSPO. This would be independent of the ombudsman and could consider the standard of services provided by the FSPO to investigate or review complaints regarding its standard of service and to make determinations that would include the FSPO being required to apologise or pay compensation where the independent assessor judges that services have not met the requisite standard. The Minister may reference the FSPO council, as the FSPO has done in response to me, but this council has no role in dealing with complaints. There is an internal unit to examine and address complaints about the FSPO's performance, but it is not independent. These are issues I raised with the ombudsman at committee last year, and it acknowledged an independent assessor would bring benefits. I again ask the Minister to consider this proposal.

As I said at the start, I welcome many of the provisions in the legislation ensuring the FSPO can function in light of the Zalewski judgment and the provisions where financial service providers have left the market. I look forward to further scrutiny of the legislation on Committee Stage, including considerations of issues I have raised today. I strongly urge the Minister to close the gap for people who wrongly had their loans sold to vulture funds, and who were given commitments by the then Minister for Finance, Deputy Donohoe, that the supports and protections would remain. It is not true. It is simply not true. It is a blatant mistruth and we have determinations from the FSPO to show that. It is not acceptable. People should have that right. It is a basic protection. I know the Minister raised the issue of regulating service credit. Nobody on the finance committee at that time would have liked to have seen this situation arise. It has arisen now. There are thousands of people caught by this and it needs to be dealt with.

See this speech in context