Fergus O'Dowd (Louth, Fine Gael)
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Question 31: 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 transactions in respect of which refunds should be made instead of hearing each case individually. [15713/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The role and functions of the Financial Services Ombudsman (FSO) in dealing with consumer complaints 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 to consider if there are any suspected breaches of the relevant regulatory requirements including the Consumer Protection Code. The Financial Regulator can, as part of its administrative sanctions regime, seek to mediate or take regulatory action in relation to a firm including an order to make refunds to a firm's customers where appropriate.

I have 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 customers of a financial services firm. The Ombudsman and the Financial Regulator have responded in a joint submission to the Department that the Memorandum of Understanding is operating as intended and that co-operation between both offices is highly satisfactory and allows issues to evolve. They have also advised that where a pricing error occurs after 1 July 2007 the provider is required under the Consumer Protection Code to speedily, efficiently and fairly correct such an error.

The Deputy may be aware that a High Court judgement in October 2007 confirmed 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. I have asked the Advisory Forum on Financial Legislation to review the implications of this High Court decision in conjunction with the joint submission of the Financial Regulator and the FSO.