Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute to this debate. Anything that gives consumers greater protection is to be welcomed. Unfortunately, we are all too well aware of situations where financial institutions have shattered the trust that has been placed in them and have exploited people's lack of financial expertise for their own material gain. Only in the last few days, we read a report by Charlie Weston in the Irish Independentabout the Financial Services and Pensions Ombudsman. He claimed that it is on the verge of collapse and that it takes up to five years for consumers to have their complaints heard.

I deal, as I am sure other Members do, with constituents who have issues with financial institutions. We make representations on their behalf. We can see the anxiety, worry and fear they go through while waiting for their concerns or queries to be addressed. It is not good enough for somebody to go to the Financial Services and Pensions Ombudsman and be obliged to have to wait up to five years. Financial advisers are telling consumers that they would be better off going to court. The whole reason the Financial Services and Pensions Ombudsman was established was to provide a free complaint resolution service for consumers. This is a State body that is funded by means of levies imposed on financial service providers and a grant from the Government. Its findings are legally binding. If financial advisers are telling people to bypass this independent body and to go down the legal route, it is failing in its duty.

I met a financial adviser quite recently. He raised a number of concerns regarding the Financial Services and Pensions Ombudsman. He told me that he has lodged 120 mortgage and pension miss-selling complaints with the Financial Services and Pension Ombudsman. He commenced filing the complaints in December 2019. The first complaint, which relates to a tracker dispute, had not been processed as of the date on which he contacted me, which was only sent in the past couple of weeks. That is 1,460 days outstanding, but the European directive on the subject recommends a target of 90 days for effective judgment. This man is dealing with a complaint that has been ongoing for 1,460 days, but the European directive on the subject recommends a period of 90 days. That is a serious failing. Other Members have spoken about whether the office is adequately resourced and staffed.

I received a briefing paper, which I will share with the Minister of State after my contribution and which he may share with the Minister, Deputy Michael McGrath, from the financial adviser to whom I refer in which he sets out concerns regarding the process of justice that is available to Irish resident purchasers of financial products and services. The concerns are that the Financial Services and Pensions Ombudsman does not adhere to, or appear to be cognisant of, its obligations under the EU directive on alternative dispute entities. The Financial Services and Pensions Ombudsman does not appear to be cognisant of the unfair terms in consumer contracts directive. There is misreporting and misclassification to Europe of the rejected and refused complaints by the Financial Services and Pensions Ombudsman. There are breaches of the European principle of effectiveness. The document in question is quite comprehensive. I will not go into everything it states, but, as I said, I will share it with the Minister of State. I hope he will be able to bring it back to the Minister for Finance in order to ascertain whether the financial adviser who gave it to me is correct in what he says.

Is the Financial Services and Pensions Ombudsman failing in its duties to protect consumers? It is certainly failing to protect consumers in the timeline that has been set down by the EU. It would appear that it is rejecting outright certain cases without even giving due consideration to them.

One issue that has been raised with me is how the Financial Services and Pensions Ombudsman does not report the EU-required statistics on the average time taken to resolve disputes. Instead, it reports the number of complaints that have been closed. In 2022, 47% of complaints were rejected, refused or deemed ineligible by customer operations and information management team. These are complaints that do not reach investigation or mediation. The Financial Services and Pensions Ombudsman does not report these complaints as rejected or refused in the European records. It is saying that the complaints have been closed. What exactly does that mean? Some 47% - almost half - of the complaints that went to the Financial Services and Pensions Ombudsman in 2022 were closed. Yet, it is still taking 1,500 days to investigate cases that should be dealt with in a period of 90 days. That is definitely not good enough.

Another issue in relation to the European Union's principle of effectiveness is that people should not have to go to the courts in order to be exonerated or have a complaint upheld. In this scenario, however, the only option following a determination by the Financial Services and Pensions Ombudsman is to take a consumer to the High Court. The costs of this process are totally disproportionate to the claims that are involved. It is not really an option for many people to take a case to the High Court. It is against the principle of effectiveness.

I am also told that the Financial Services and Pensions Ombudsman routinely indicates in the letters it issues to consumers that if they are not happy with a decision, they can take the matter to the High Court but that if they do so, they should be aware that it may seek legal costs in respect of any failed claim in the High Court. It is therefore telling them to go to the courts but that if they fail, it will come after them for the costs. This office is meant to be in place to exonerate the ordinary citizen and the consumer who has been blackguarded by a bank, financial institution or the insurance companies. Some of the mechanisms it is using are heavy-handed.

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