Just under €2.25 million was repaid or awarded in compensation to customers of financial institutions last year on the direction of the Financial Services Ombudsman.
Almost 60 per cent of the money awarded was in relation to the investment sector, but almost all complaints related to the banking and insurance sectors.
Some 7,300 complaints were made to the ombudsman against financial institutions in 2011 relating to three broad sectors - banking, insurance and investments. Some three-quarters of these complaints were not upheld.
Almost half of all complaints received related to the insurance industry, more than one third were about banking and fewer than 15 per cent related to investment products. A similar percentage of complaints was upheld in relation to each sector, but compensation in relation to investment complaints far exceeded those for banking or insurance complaints.
Just under €1.35 million was awarded in relation to investment complaints, almost €640,000 for complaints in relation to the insurance sector and almost €260,000 for complaints about banks.
Mis-selling or misrepresentation of products accounted for the greatest proportion of complaints about the investment sector at 45 per cent, followed by customer care and maladministration complaints at 34 per cent, with the remainder made up of fees and charges complaints and complaints over performance of policies.
Mis-selling accounted for far fewer complaints in the other two sectors, representing 10 per cent of complaints about insurance and just 5 per cent of banking complaints.
More than 40 per cent of complaints against banks related to mortgages, general complaints about bank accounts formed 27 per cent of complaints, general lending complaints accounted for 16 per cent, and credit cards accounted for 11 per cent of complaints.
The product attracting the most complaints in the insurance sector was motor insurance, at just over 16 per cent, closely followed by household buildings insurance at just under 16 per cent.
Life insurance and payment protection products each accounted for 12 per cent of complaints, medical expenses accounted for 10 per cent as did travel insurance, while mortgage protection accounted for 6 per cent.
In the case of all insurance products, just under 40 per cent of complaints related to refusal of the company to pay out or to disputes in relation to the settlement amount.
The ombudsman’s office has seen a surge of complaints in recent years from 4,374 in 2007 to 7,619 in 2009. Publishing his biannual review for the last six months of 2011 Ombudsman Bill Prasifka said he was concerned that their levels remained high.
“After a number of years of record increases, 2011 showed a levelling off of new complaints, but they still remain extremely high, showing the continued pressures faced by consumers particularly in mortgage and related insurance areas.”
The review showed an increase of 6 per cent in investment complaints in the last six months of 2011 compared with the first six months, and a decrease of 9 per cent in banking and insurance complaints.
There was a slight decrease of 3 per cent in the number of complaints upheld, which “reflects well on some financial institutions”, Mr Prasifka said.
“However, the industry must continue to change is practices in dealing with consumers and make genuine efforts to work with consumers before complaints are referred,” he said, adding it was very clear such engagement was to the benefit of all parties.
