Financial Services and Pensions Ombudsman Overview of Complaints 2022

This report marks the first publication from the FSPO since Liam Sloyan, the former chief executive of the National Treatment Purchase Fund (NTPF), took up the role of Ombudsman in December 2022.

In his opening message, the Ombudsman looks back over 2022, highlighting the key areas of concern:

• Complaints related to customer services issues continue to dominate the work of the FSPO, with a continued concerning rise from 23% to 28% of total complaints between 2021 and 2022. The FSPO stressed that; 

“Providers seeking to resolve complaints at the earliest stage would not only contribute in a positive way to the vision of this Office for a progressive financial services and pension environment built on trust, fairness and transparency, where complaints are the exception; it would also make a significant difference to the customers of those providers, by removing the requirement for complainants to use the services of the FSPO”.

• Market exits – the report notes that, since the FSPO began tracking complaints related to market exits in June 2022, less than 100 complaints of this nature have been received by their office. The FSPO will continue to work collaboratively with key stakeholders with the Irish banking sector and directly with the Providers leaving the market to ensure the experience of customers impacted by the exits is shared and that suitable process and resources are in place to manage complaints both now and in the future. With the migration of loan portfolios still in progress, the potential complaints volume to emanate from this activity remains unclear.
• Fraudulent activity – for the second year in a row the FSPO highlighted complaints related to fraud, in particular online scams and banking payments. It was again emphasised that the Ombudman’s office cannot investigate fraud given that it is a criminal matter for An Garda Síochána to investigate. However, the office can and will investigate complaints for alleged customer service failings of a Provider when dealing with a customer who suspects fraud or unauthorised transactions. This issue, which originally spiked during Covid-19, has persisted in financial services complaints over the last number of years, in particular for the banking sector.
• Covid 19 – The FSPO has been tracking complaints related to Covid-19 since 2020 and has prioritised complaints related to business interruption insurance given the huge impact that these cases could have on customers’ businesses. The report details the most recent update on a number of contentious business interruption insurance decisions. A single decision which was challenged by a Provider in the High Court and where the judgement in October 2022 upheld the terms of the FSPO’s decision in the case meant that the FSPO was able to progress similar which had been on hold during the proceedings. The FSPO referred 19 business interruption decisions with the Central Bank of Ireland (‘CBI) in 2022.

Report on named Financial Service Providers (aka League Table)

As per the Financial Services and Pensions Ombudsman Act 2017, the report includes a table which includes all regulated Financial Service Provider with a minimum of three complaints upheld, substantially upheld, or partially in 2022.

Tracker Mortgages

Despite the CBI issuing their final report on the Tracker Mortgage Examination in July 2019, as well as enforcement actions and fines against all the major Banks now being complete, Tracker mortgage related complaints continue to constitute a considerable portion of the work of the FSPO. Indeed, the FSPO is still receiving new Tracker mortgage interest rate complaints, with 139 received in 2022. 247 Tracker complaints were closed in 2022 (down from 370 in 2021), with 134 being from a legally binding decision from the FSPO.

Of these, only 3 complaints were upheld in any way by the FSPO with a total of €13,000 in compensation or rectification paid across the 3 cases. 131 Tracker complaints were rejected in 2022. Within the 131 rejected, 5 cases were rejected on the basis that the Provider made a reasonable offer during the investigation. The remaining 126 were rejected outright on the merits of the complaint. The FSPO referenced the obvious trend in the report, whereby their office continues to receive a considerable number of complaints from customer to maintain the belief that they are entitled to a Tracker interest rate on their mortgage despite having no entitlement to such a rate, contractual or otherwise. The report includes a number of rejected Tracker related decision from 2022 which showcase the type of arguments the FSPO is rejecting in these circumstances. These decisions, along other published decisions on the FSPO’s website are an invaluable resource to both customer and Providers.

A significant number of existing Tracker complaints are still making their way through the FSPO process, with 1,030 cases open and active with the FSPO at the end of 2022. This backlog demonstrates complexity of this issue. In excess of seven years have now passed since the CBI outlined the framework for the Tracker Mortgage Examination, with an additional eight years since the FSPO received their first Tracker related complaints. However, some customers are still awaiting final resolution. Furthermore, a number of ongoing High Court Appeals of FSPO decisions relating to the Tracker Mortgage Examination could potentially result in new customers receiving redress and compensation under the Examination for the first time. This industry-wide review truly was the first of its kind and will continue to dominate the complainant landscape for some time to come. The true breadth and ultimate cost of the Tracker Mortgage Examination still remains to be seen.

2022 Closed Complaint Statistics

A total of 4,781 complaint were received by the FSPO in 2022, a slight increase from 4,658 in 2021. Looking at these complaints by sector, Banking continued to generate the highest number of complaints as has been the case over the last number of years, accounting of 55% of complaints. Within Banking, looking at complaints by their corresponding product saw Accounts related complaints overtake Mortgage related complaints for the first time (accounting for 31% and 44% of all Banking complaints respectively). In terms of conduct, customer service remains the most frequent complaint issue in Banking.

The Insurance sector accounted for 24% of overall complaints with Motor Insurance and Claim handling being the top product and conduct complained of. Investments and Pensions accounted for 8% and 5% respectively of all new complaints.

FSPO – ‘How we managed complaints in 2022’

Unlike 2020 and 2021, complaint closures fell below volumes received in 2022, with 4,781 received vs 4,647 closed. Despite ongoing challenges, the FSPO remains wholly committed to the provision of an efficient and high quality level of service to complainants. This is particularly apparent in the number of cases closed in the earliest stages of the FSPO process; Customer Operations and Information Management (COIM) rand Dispute Resolution. In 2022, 2,090 cases were closed in COIM and 1,722 in Dispute Resolution, representing 82% of the overall cases closed for the year.

The early assessment in COIM ensures that the FSPO’s resources are allocated efficiently on complaints which are eligible for their specific process. In a significant number of these cases, the complaint is remitted back to the provider and a resolution is reached for the customer without the need for further intervention from the FSPO. A further 206 cases were closed by the FSPO Legal Services department, owing to the limits of the Ombudsman’s statutory jurisdiction under the Financial Services and Pensions Ombudsman Act 2017.

Where cases are eligible and do progress, the vast majority are resolved in Dispute Resolution Services. Of the 1,722 complaints closed in Dispute Resolution in 2022, the value to customers totalled €3,425,443.

The value of proactively engaging in the Dispute Resolution process cannot be underestimated. It provides an informal and completely confidential space, mediated by an FSPO Dispute Resolution Officer, where Providers and customers can work together towards the resolution of a complaint. This may be reached by way of a mediated settlement between the parties or, simply be way of clarification (505 cases, 10% of all cases closed in 2022, resolved in this way).

Only 629 (13%) of complaints closed through Investigation Services in 2022. Dispute Resolution is a voluntary process, and if a complainant wishes to proceed to the Investigation and Adjudication of their case a Provider cannot stop this. However, Providers can and should be proactive about resolving complaints at this stage of the FSPO process. 116 of the complaints closed through Investigation Services in 2022 were settled without a decision from the FSPO on foot of an on-the-record offer from the Provider with these settlements totalling €965,527. At decision, 74 cases were not upheld because the FSPO found the Provider made a reasonable offer at an early stage, with the value of these cases totalling €174,495. A further 36 cases were closed with an undisclosed settlement being reached between the Provider and complaint.

Early resolution of complaints is beneficial to all parties and we at Grant Thornton advocate for Dispute Resolution in all relevant FSPO complaint cases. It provides an excellent opportunity for Providers to re-engage with their customer with the expert assistance of the FSPO. The unnecessary progression of a complaint through the FSPO process to Formal investigation stage creates further inconvenience for the customer as well as additional time and resource for the Provider. For Providers, the Formal Investigation and Adjudication process should be viewed as a last resort, to be availed of only when all other avenues have been exhausted.