Fergus O'Dowd (Louth, Fine Gael)
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232. To ask the Minister for Finance if he will respond to a proposal (details supplied) in respect of issues in relation to the long delays to case determinations by the Financial Services and Pensions Ombudsman; if further resources are being ringfenced for the Ombudsman to clear the current backlogs; and if he will make a statement on the matter. [14670/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The FSPO is the statutory body established to resolve complaints from consumers, including non-personal customers, businesses and other organisations, about the conduct of regulated financial service providers and pension providers. The functions of the Ombudsman are set out in Section 12 of the Financial Services and Pensions Ombudsman Act 2017 (‘the Act’).

The Ombudsman has wide-ranging powers to deal with complaints against financial providers, pursuant to section 60 of the Act. The Ombudsman can direct a provider to rectify the conduct that is the subject of the complaint. There is no limit to the value of the rectification that can be directed. The Ombudsman can also direct a provider to pay compensation to a complainant of up to €500,000. The FSPO does not have powers to impose sanctions or penalties on providers. The Ombudsman recently published his 2022 Overview of Complaints, which highlighted that the combined outcomes worth over €5million were delivered for complainants whose complaints were resolved, during 2022.

When a complaint is received by the FSPO, it is reviewed and assessed before it is either referred to the Dispute Resolution Service for mediation or, where the complaint cannot progress any further, it is closed. Of the total number of complaints closed during 2022 (4,647), more than 80% of closures occurred within 12 months of receipt, either during the FSPO’s Registration and Assessment of the complaint, or through mediation, by the FSPO’s Dispute Resolution service.

When a complaint is not resolved through mediation, it may be transferred for a formal jurisdictional assessment, if an issue of eligibility has arisen, or for formal investigation and adjudication of the complaint, leading to a legally binding decision. Approximately 18% of complaints closed in 2022 had been referred for a formal jurisdictional review or for formal investigation and adjudication.

The formal investigation and adjudication process is a detailed, fair and impartial process carried out in accordance with fair procedures. The FSPO’s established procedures, for the formal investigation of complaints, ensure that both the complainant and the provider receive a copy of all information submitted by both parties and held on file, and they are given every reasonable opportunity to offer comments and observations on the contents of such evidence. When the parties have concluded their submission of evidence and observations, all of those details are taken into account in the adjudication of the complaint, which leads to a legally binding decision.

Such formal investigations take considerably longer to complete, than an agreed resolution, where the parties themselves are facilitated to design an agreed resolution to the complaint. Excluding tracker mortgage complaints, the average time from referral for a formal investigation to conclusion of investigation was 22 months, for complaints that closed in 2022. This is in addition to time spent in the earlier complaints processes.

For tracker mortgage complaints, the formal process has taken longer. For tracker mortgage complaints closed by way of legally binding decision in 2022, the average timeline was three and a half years from referral for formal investigation to the conclusion of the investigation. This is in addition to time spent in the earlier complaints processes. This timeline reflects the significant period of time when such tracker mortgage complaints were placed on hold by the FSPO, pending the outcome of the Central Bank of Ireland directed Tracker Mortgage Examination (TME).

The Ombudsman was of the view that the best way of ensuring that the FSPO had all of the necessary information to deal with such complaints, was to await the outcome of the TME and confirmation of the impact, if any, on the individual mortgage loan account, before progressing the formal investigation.

The FSPO has a strong focus on reviewing its processes, systems and resourcing, to identify improvements that can be made to timelines and to continue to deliver fairness and efficiency for all its customers.

Resourcing and workforce planning of the FSPO is the responsibility of the Ombudsman, in accordance with Section 15 of the Act and is kept under constant review to ensure there are appropriate resourcing levels in place to fulfil its statutory functions.