Financial services ombudsman warns banks and insurers to up their game

The FSPO office hit the headlines recently when it emerged it is now taking up to five years to resolve some consumer complaints. Photo: Getty

Charlie Weston

Banks and insurance companies have been warned by the financial services ombudsman to improve their services to consumers.

It comes after new figures show a 30pc increase in the number of complaints made to the office of the Financial Services and Pensions Ombudsman (FSPO) last year.

Ombudsman Liam Sloyan insisted his office was increasing the number of complaints it was closing off.

The FSPO office hit the headlines recently when it emerged it is now taking up to five years to resolve some consumer complaints.

It emerged that the ombudsman’s office told one complainant it will take another three years before they can expect a decision from the office. The complaint was submitted two years ago.

But releasing figures for last year, Mr Sloyan said his office delivered outcomes worth over €4.7m to consumers last year.

He said there was a 12pc increase in the number of complaints closed in 2023, at 5,184.

Complaints to the FSPO rose to a record high of 6,182 in 2023, increasing 29pc since 2022.

Mr Sloyan said that despite a steep rise in the number of complaints received, the FSPO closed many of these complaints through dispute resolution (mediation) processes and early-stage assessments and interventions.

He said 85pc of complaints that were resolved closed within 12 months of the complaint being made.

The Financial Services Ombudsman warned banks, insurers, brokers and other financial service providers to do more to ensure consumers do not complain about them.

“It is important for providers to consider what measures they can take to reduce the number of complaints arising.

“An increase of almost 30pc in the number of complaints being made to the Financial Services and Pensions Ombudsman in just one year should be a cause for reflection amongst providers,” Mr Sloyan said.

The FSPO is an independent and free complaint resolution service for consumers.

A state body, it is funded by levies on financial services providers and by a government grant.

Its decisions are legally binding. It was set up to avoid consumers having to go to court to get complaints about financial firms resolved.

The ombudsman said that of the 6,182 complaints received, a quarter concerned customer service issues.

The banking sector made up 62pc of complaints received.

Insurance sector complaints accounted for a quarter of all complaints made.

Last month the Irish Independent revealed a legal loophole which means thousands of people whose mortgages were sold to vulture funds have no access to the financial ombudsman service.

Finance Minister Michael McGrath has promised he will change the law to close the legal loophole, which means large numbers of these mortgage holders whose loans were sold to vulture funds are unable to use the ombudsman service to make complaints if they are in dispute over the handling of their loans.

In its data release, the ombudsman said it has begun collecting figures for non-regulated entities, or vulture funds, and 74 such complaints were received.

Mr Sloyan said: “Customer service is again the conduct most complained of for the third year in a row.

“It is disappointing that many of the complaints received by this office continue to be of a nature that could be resolved earlier, without a need for our services.”