It was pointed out that despite tracker mortgages being one of the biggest financial scandals in the history of the State, not one complaint in relation to them was fully upheld in 2024.
I would argue, however, that while the ombudsman is unacceptably slow in processing some complaints, the decisions are independent and fair and that a 6pc rate is actually an indicator of success and not one of failure, much less evidence of bias of any sort.
Complaints go through a financial institution’s own complaints process first, and then the FSPO’s mediation process, before they reach the final stage where a decision is made.
The ombudsman processed 2,700 complaints in 2024 and 90pc of them were settled through mediation or directly between the financial institution and the customer.
Most, but not all, genuine complaints are being settled by the financial institutions long before they get to the written decision stage.
Only 271 complaints went all the way to the end where the ombudsman had to issue a written decision. These were cases where either the institution or the customer was too unreasonable or too stubborn to resolve them earlier.
Contrary to the widely held opinion, financial institutions want to settle complaints as early as possible. Ideally, they will resolve the complaint directly with the customer but, if that fails, then they will try to resolve it through mediation.
There is no benefit to a financial institution in being unreasonable or stubborn. It is very expensive to defend a complaint all the way through the many years of the FSPO’s adjudication process.
A success rate of 6pc is an indicator that the banks are being reasonable in settling complaints early. If the ombudsman upheld 94pc of complaints, it would mean that the financial institutions were not settling genuine complaints early on in the process.
Every written decision is published on the ombudsman’s website. Many complaints have little merit, with some bordering on the frivolous or vexatious.
The handling of tracker mortgages illustrates how the overall system has worked for customers.
Why did the ombudsman not uphold a single complaint in 2024? Because, under pressure from the Central Bank, the banks resolved most of the tracker issues directly with borrowers so very few genuine complaints needed to go to the ombudsman. Some 30,000 customers got substantial redress over the wrongful loss of their trackers.
But when the banks did not treat their tracker customers fairly, the ombudsman held them to account. For example, AIB stubbornly and unreasonably denied trackers to customers whose contract said they would get the prevailing tracker rate when their fixed rate ended.
I took a complaint on behalf of a customer and it was upheld. As a result, the Central Bank told AIB to roll out that decision to the other 6,000 customers who had the same clause in their mortgage contract.
Looking at the bare statistics, that would appear as one case upheld by the ombudsman and €50,000 of compensation. But 6,000 customers benefited from that one decision and received total compensation of about €240m.
Incidentally, the bank’s treatment of this cohort of tracker customers was a major factor in the fine of €83m imposed by the Central Bank on AIB for its role in the tracker scandal.
While I am satisfied the FSPO deals with complaints fairly, it is too slow.
The act which set up the ombudsman is clear: complaints should be investigated in a manner “proportionate to the nature of the complaint” in a “timely and effective manner” and “in an informal manner, efficiently, effectively and fairly”. I do not believe these requirements are being complied with.
It is taking the FSPO many years to decide on some complaints. I am advising on a complaint lodged in June 2021.
The correspondence with the bank finished in September 2021 and the ombudsman wrote to the complainant saying the adjudication had begun and a preliminary decision would issue in 12-18 months.
More than four years later, no preliminary decision has been issued. This is not acceptable and it is not in the interests of either the bank or the customer.
It seems to me every complaint is treated like a High Court case, irrespective of its merits or the amount at stake.
The ombudsman rejects 94pc of complaints that reach the written decision stage. Most could be disposed of by junior staff in a matter of weeks. Senior staff would then be free to deal with the more complex and serious complaints.
Pearse Doherty, the Sinn Féin TD, recently made a complaint to the FSPO about Revolut’s handling of his account.
I am confident he will get a fair decision. The question is when. I’m not sure which will come first – the decision from the ombudsman or a united Ireland.
Brendan Burgess is founder of Irish consumer forum askaboutmoney.com
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