Written answers

Wednesday, 18 October 2006

Department of Finance

Customer Overcharging

9:00 pm

Photo of Jack WallJack Wall (Kildare South, Labour)
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Question 145: To ask the Minister for Finance if the Financial Regulator has or will take action regarding the recent announcement by a company (details supplied) of further overcharging of customers to the sum of €31 million due to a consistent policy of increasing foreign exchange margins a certain branches; and if he will make a statement on the matter. [33090/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The Financial Regulator published two reports, in July and December of 2004, focusing on the investigations into foreign exchange and other charging issues within the company referred to by the Deputy. A number of charging issues were identified during the investigation amounting to a total of EUR34.2 million, estimated in 2004 to be refunded to customers. As with all investigations, the Financial Regulator's priority has been to identify, refund and inform customers and where this is not possible, to ensure that the institution does not benefit from any case of overcharging.

Arising from the issues identified in 2004, the Financial Regulator agreed a strong programme of remedial actions with this firm, to rectify the systems and control weaknesses revealed by the investigations and strengthen the environment for staff to deal with regulatory issues in an ethical, consumer and compliance-focused manner.

In the course of this process, further issues arose, the investigation of which has now been completed to the satisfaction of the Financial Regulator and the payment of restitution to customers, where it has been possible to identify them, will amount to EUR11m. Where identification has not been possible, the firm in question has agreed with the Regulator that a payment of EUR20.6m will be made to charity.

The whole regulatory structure for Irish financial services was reformed with the establishment of the Financial Regulator in 2003, with its statutory consumer protection mandate. Further legislation, the Central Bank and Financial Services Authority of Ireland Act 2004, provided enhanced protection for consumers. The announcement to which the Deputy refers, is a result of the strong supervisory approach and the new culture of compliance fostered by the work of the Financial Regulator with the financial services industry. A statutory Financial Services Ombudsman was appointed in April last year, further strengthening the regulatory environment for the protection of consumers in the financial services sector, by providing a mechanism whereby complaints about the actions of financial service providers may be investigated.

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