Mortgages top banking complaints

Complaints about mortgages led the way when it came to issues coming before the Financial Services Ombudsman last year, with the ombudsman also stating he was concerned that some banks were denying customers access to online banking.

The FSO published its annual review yesterday which shows it received 4,334 valid complaints last year, alongside 2,198 complaints active from previous years, and that 42% of the complaints lodged in 2016 relate to banking products, led by mortgages with 959 complaints.

Another 1,866 complaints relate to insurance products, led by motor insurance (382 complaints), while just 5% of complaints received relate to investment products.

Of the 4,323 complaints dealt with last year, more than 1,800 complainants received some form of compensation, rectification or financial redress.

Some 2,421 complaints were closed through the FSO’s new Dispute Resolution Service and 46% of successful mediations were resolved within two months. There were 727 legally binding findings issued following adjudication and of these, 101 complaints were upheld and 216 were partly upheld.

The FSO directed financial service providers to pay compensation totalling €1,569,571 to complainants in 2016.

Writing in the report’s foreword, Financial Ombudsman, Ger Deering, said access to certain financial services in the banking and insurance sectors “is not a luxury” and that he was “concerned to note, in a number of complaints to this office, the manner in which some banks denied access to online banking, did not process certain transactions or froze or closed bank accounts in an unreasonable manner”.

He later said that this came at a time when banks were actively encouraging more bank business online, yet some people were denied this because of missed payments. He also warned of the dangers of non-disclosures when seeking insurance, claiming even minor omissions could affect the likelihood of getting insured elsewhere.

Some of the complaints resolved through mediation included a person who lost their No Claims Discount on their car insurance, and a complainant who took out a bank loan over several years which was paid back in full in 2013, but whose Irish Credit Bureau did not show that the loan was repaid, putting a mortgage application in jeopardy.

In cases resolved through adjudication, one institution was directed to pay €100,000 to a person who had a specified illness claim unreasonably declined.

The FSO directed that €30,000 be paid towards the complainant’s medical costs in a dispute regarding “pre-existing conditions” involving a travel insurance policy.

The report listed firms who had at least three complaints against them upheld or partly upheld.

Ulster Bank had 18 complaints upheld and 21 part upheld, followed by AIB with nine upheld and 34 part upheld.

According to the report, the FSO had 2,198 active complaints at the end of 2016 — a number that included almost 400 tracker mortgage complaints — “most of which are on hold pending the outcome of the examination being carried out by banks at the direction of the Central Bank”.

The FSO responded to more than 10,000 telephone contacts in 2016 and received more than 1,500 complaints online and is also involved in a number of High Court appeals.