Gerald Nash (Louth, Labour) | Oireachtas source

I am happy to defer to my colleague from Louth. It seems that 60% of the contingent of Louth Deputies are now present in the Chamber. I was not aware that there was that much interest in the Financial Services and Pensions Ombudsman (Amendment) Bill, but I am pleased to see there is. I am also pleased to have the opportunity to contribute on this Bill. The Labour Party supports this legislation and we may table Committee Stage amendments if required.

The FSPO has, in the main, served citizens well. It is important that it continue to be well resourced and retain the confidence of the public. These are matters that I will return to in my contribution.

When we distil the Bill down to its basic framework, its essence seeks to do two things: ensure that customers of financial service providers that have departed the Irish market can continue to avail of consumer protections and access the FSPO, and make legislative provision for the Zalewski judgment and ensure that the FSPO continues to discharge its statutory functions in accordance with the Constitution.

The Zalewski case found that hearings of the WRC should be held in public. This has direct implications for bodies with the statutory functions of the FSPO and many other equivalent bodies that are engaged in forms of administration of justice, broadly defined. As it stands, the legislation establishing the FSPO needs to be amended to take account of the wide-ranging implications of the judgment and to allow the office to continue carrying out its important work on behalf of citizens and financial services firms. In its judgment, the Supreme Court also held that the exercise of powers by the adjudication officers of the WRC involved the administration of justice under Article 34 of the Constitution, as already mentioned by other Deputies. This was a significant and important ruling for workers and has had obvious consequences for bodies such as the FSPO.

Section 56(4) of the Financial Services and Pensions Ombudsman Act 2017 reads: "The Ombudsman shall, without prejudice to the form of investigation, ensure investigations are conducted otherwise than in public." This Bill amends the 2017 Act so that, where the Ombudsman determines that it is appropriate or desirable for a complaint investigation to include an oral hearing, the Ombudsman shall decide whether to conduct any such oral hearing in public or in private, "having consulted with the parties to the complaint and having considered the nature or circumstances of the complaint and whether it is in the interests of justice to do so". Given that it is a core tenet of justice that it be conducted in public, with transparency as a cornerstone of the common law system, this proposed wording gives a great deal of discretion to the Ombudsman. That discretion has to be used cautiously.

That being said, and having read the transcripts of the pre-legislative scrutiny hearings - I do not have the benefit of being a member of the committee - I am largely persuaded that this discretion is to be applied in the best interests of the citizen who might make a complaint and have it dealt with all the way through the process. The last thing that anyone would want is for an individual’s personal financial situation or health and medical situation to be discussed at a public hearing. That would not be appropriate. Such situations arise in public forums from time to time and bodies such as the FSPO need to be very mindful of that. This is the nature of the business that the likes of the FSPO does.

It is important that these powers of discretion as to when hearings are to be in public or not are circumscribed and used in an informed and consistent way, can be justified and at all times are in accordance with the Zalewski judgment and the constitutional requirements. It is important that the performance of the office in this regard be kept under review and that this provision in particular be subject to frequent formal review. The changes made at the WRC on foot of the Zalewski case are different when put side by side with the way in which this legislation envisages the FSPO's future operations, so we have to keep a watching brief on the FSPO's performance, given the wide-ranging powers of discretion that the House is being asked to provide to it.

From figures I read a year ago that were given to the Sunday Independent, from June 2022 to March 2013 the FSPO received over 100 complaints relating to the exit of banks and other financial services providers from the Irish market. In some respects, this may be considered a small number, given the fact that, in 2022, nearly 700,000 accounts were closed at Ulster Bank and KBC as they prepared to exit the market. As the FSPO acknowledged at the time, however, some customers were experiencing real problems with their exiting banks, or in some cases their receiving banks, and these problems were “seriously impacting their lives.”

It was heartening at the time to read that most of those complaints, according to the FSPO, were resolved early in the complaints process. That is a good thing and is as it should be. That, in itself, is an expression of the importance of an independent adjudication process and vindicates the very existence of the FSPO.

I note with interest the Department’s periodic review of the FSPO, which was published last June and made a couple of important recommendations. Two things stood out for me in section 2 of the review, the first of which was the need for greater awareness of the role and functions of the office among younger people and among what the review describes as "certain social classes". In my lengthy experience as a public representative trying to assist constituents who have complaints to make about a service provider or a product, the default position seems to be that they assume they can make a complaint to the Central Bank. They are not generally aware that the Central Bank may not have a remit in relation to their case. The Central Bank is the regulatory body which deals with systemic issues in the financial services sector involving regulated bodies. More often than not, individual cases brought to our attention by constituents are more appropriately dealt with by the FSPO. When the Minister sums up at the end of the debate, he might let the House know what actions he has advised the FSPO to take. What actions does the FSPO plan to engage in to reach what we might describe as the harder to reach audiences? I refer to citizens who may have financial or digital literacy issues, who may not understand the products they may be having problems with, and who may need special assistance in having their complaints dealt with.

I would also like to ask about another recommendation made in the periodic review. In their consultations and engagements with the FSPO, have the Minister and the Department made progress on the introduction of an accessible online tracking system so that complainants can track the status of their complaints and see clearly what the next steps are? I raise this because of the direct experience of constituents of mine over the years and because of a story penned by Charlie Weston in the Irish Independentthis week, which we read with concern. It was relayed by Deputy Doherty earlier on. The article articulates very clearly some concerns of financial advisers who are in the system now. They claim that the service has in effect “collapsed”, as stated in the article, which refers to intolerably long delays in having some complaints adjudicated on. It seems from the FSPO and from Charlie Weston's story that the average timeframe for referral of a complaint to adjudication and assignment to an adjudication officer is 12 to 15 months. Once a complaint file is assigned, it takes a further 12 to 18 months for a preliminary decision to issue. The Minister of State will agree that this kind of timeframe is unacceptable. It is important to note that the average length of time for a complaint to be resolved with the FSPO is ten months, with more than 80% being closed within 12 months. That is, of course, a good thing.

There has to be confidence in the FSPO and the efficacy of the complaints process if it is to be used effectively and if it is to reach those who need it most. Issues like this arise when there are resource problems. I would appreciate it if the Minister of State would put on record the total staff complement at the office, which I believe may be approximately 80 or slightly more. How does he envisages that this will increase? Does the Department have an agreement or understanding with the office on improving outcomes for complainants on timelines for the conclusion and resolution of processes? If additional resources are being provided to the FSPO, I imagine and hope that a condition of those resources would be an agreement - a quid pro quo- on timelines for the conclusion and resolution of processes and improvements in that regard.

Clearly, organisational capacity is a factor and needs to be addressed. Public confidence in organisations like this is a fragile thing and needs to be minded. A fit-for-purpose avenue of redress that is free of charge, has public trust and does not involve the courts is crucial to a functioning and fair financial services system. I think we will all agree that a feature of that system is a vast inequality of arms between the customer and the industry. There is a massive imbalance of power. Our society is replete with examples of banks and other financial services institutions using untrammelled power in the past - indeed, some are using it still - to wreak havoc and destroy lives. We need to value independent and impartial bodies like the FSPO and make the necessary investments and adjustments to the legislative provisions governing them. That is what we are doing here today. It is actually a democratic imperative to do so. We support the principles of this Bill and what it is seeking to achieve.

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