Joanna Tuffy (Labour)

While I also broadly welcome the legislation, I was interested in what Senator Ross had to say, especially about the impact of the legislation and whether it has teeth. I agree it is good to have penalties. This compares with the Ombudsman who deals with local authority issues etc., in which penalties are generally not involved. In many ways that Ombudsman does not have teeth and has more to do with shaming of local authorities, hospitals etc. when they fail to treat their customers properly.

In light of what Senator Ross said about the fines representing a pittance, we need to ask whether the penalties are for show and would not really impact on the overall problem of financial institutions and their dealings with the public. We need legislation that makes the banks and other financial institutions afraid of the possible outcome of complaints to the Ombudsman.

These kinds of accountability measures for financial and other institutions are welcome and necessary. However, sometimes they represent a veil giving the appearance that something is being done when the overall problem still remains and is not addressed significantly. I have had considerable experience of the Ombudsman in my dealings with local authorities. While it is good that the Ombudsman exists, that office represents a drop in the ocean. Even though so much of the practice of local authorities in their dealings with customers is wrong, they carry on regardless. Having an Ombudsman to address local authority issues is not enough and I hope that it will not be the same with the ombudsman for financial institutions.

I support calls by Senator John Phelan and others that consumers should have a role on the panels. While amendments were tabled in the Dáil on this matter, as far as I know the Minister did not accept them. I hope he might reconsider these in the Seanad. As this legislation is for the benefit of consumers, it is very important that consumer interest plays a very significant role. Irish consumers do not question matters sufficiently often. However, they are far more likely to question dealings with other commercial interests than those with banks. Senator Ross mentioned cartels. Competition in financial services is not enough and will not stop the problem. Much more needs to be done to help consumers in their dealings with financial institutions.

Many consumers dealing with financial institutions do not question interest charges or analyse their statements and accept outrageous credit card charges etc. When dealing with financial institutions, consumers feel they lack knowledge and work from the premise that all the knowledge is on the side of the financial institutions and they do not go back to financial institutions if they have been overcharged. When we hear of scandals such as AIB overcharging, we recognise how little people question what happens. Having been self-employed for a period, I recognise that small businesses need protection in their dealings with financial institutions.

It is very important in this legislation to ensure people use the ombudsman. We must promote the office as much as possible and do much more to encourage questioning of the dealings of financial institutions with the public. I hope the Minister will give further consideration to the question of accountability to the Houses of the Oireachtas and make provisions whereby we can review the legislation to ensure it is working.