John Perry (Sligo-North Leitrim, Fine Gael)
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Question 100: To ask the Tánaiste and Minister for Finance if he has plans to amend the legislation governing the Financial Services Ombudsman in order that he can make rulings on classes of transaction in respect of which refunds should be made instead of hearing each case individually. [23620/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Financial Services Ombudsman (FSO), established in April 2005 to deal with consumer complaints about financial service providers, has made a very significant contribution to protecting and promoting the interests of consumers of financial services. Where a complaint is upheld the Financial Services Ombudsman can direct the financial service provider to pay compensation to the complainant for any loss, expense or inconvenience sustained by the complainant and can also issue directions to the financial services provider concerned to change a practice relating to its conduct. To end September 2007 the Financial Services Ombudsman has received 10,463 complaints and has concluded 9,608 cases, 60% of which were settled in the complainants favour.

The role and functions of the FSO in dealing with consumer complaints strongly complements that of the Financial Regulator in protecting the interests of consumers of financial services as a whole. During the passage of the FSO legislation through the Oireachtas in 2004 it was stated, on behalf of the Minister for Finance, that the Ombudsman's remit essentially is to deal with individual complaints from customers of financial institutions and it is the responsibility of the Consumer Director in the Financial Regulator to deal with general issues relating to the protection of consumers.

The relevant legislation provides for co-operation between the Financial Services Ombudsman and the Financial Regulator on general issues relating to the protection of consumers. A Memorandum of Understanding has been concluded between the Financial Services Ombudsman and the Financial Regulator to ensure the efficient and effective handling of complaints. An issue drawing attention to a general breach affecting consumers can be referred by the Financial Services Ombudsman to the Financial Regulator. Such issues can then be examined by the Financial Regulator through its codes of practice and its administrative sanctions regime. The Financial Regulator can, as part of the administrative sanctions regime seek to mediate or can make rulings in relation to classes of transactions and order refunds if appropriate.

A recent High Court judgement confirmed in that context that the Financial Services Ombudsman's power of direction, except in relation to a change in general practice, may only relate to an individual claimant and does not extend to payment of compensation for other consumers in relation to similar conduct of the financial service provider. The FSO and Financial Services Ombudsman Council have asked me to review the implications of the recent High Court decision and to consider if a change in legislation is warranted. I propose to refer this issue to the Advisory Forum on Financial Legislation which will be commencing work shortly to consolidate and modernise legislation governing financial services regulation. In the interim my Department has asked the FSO and the Financial Regulator to review their current co-operation arrangements to ensure that these work smoothly where a finding of the FSO in an individual case may have implications for a broader group of consumers.