Financial Services Ombudsman Bill Prasifka has said banks and other financial institutions may face a bigger bill for running his office if the number of cases it handles continues to increase.
Mr Prasifka said yesterday he may approach the Department of Finance to discuss asking banks and other financial institutions to increase the levy they pay to fund his office’s operations.
Mr Prasifka said the flow of complaints to his office from disgruntled bank and insurance company customers had risen by 27 per cent in the past year, and he expected activity to rise even further as the banks dug deeper into their books of troubled mortgages in the coming months.
“If things continue to get much busier, we will have to contemplate seeking a step-change in our resources. We are funded by a levy on the industry, and we may have to talk to the department and look at that levy,” he said.
The Irish Banking Federation (IBF) said it had already held discussions with Prasifka about whether the Financial Services Ombudsman (FSO) required more resources.
Its spokesman said its preference was for banks to successfully deal with more complaints at source, staunching the flow of issues referred to the FSO.
“That would deal with the ombudsman’s resources issue more effectively,” the IBF said, adding that it would look at any further request from Mr Prasifka.
New powers
The warning from Mr Prasifka came after it emerged that Minister for Finance Michael Noonan had signed a ministerial order to give the FSO the power to name and shame banks and other institutions in its twice-yearly reports.
Until now, the ombudsman was restricted in terms of naming institutions against which it had found fault.
“I have given the FSO the power to name financial service providers who have at least three complaints against them substantiated,” said the Minister. “Financial service providers who are failing their customers will be publicly identified and incentivised to make real improvements.”
The order will come into effect from September 1st. Mr Prasifka said the first report naming institutions against whom it made findings would be in the new year, in the publication covering the period from July to December 2013.
In order for a bank or insurance company to be named, at least three complaints against it need to be upheld, or partially upheld, in the previous year.
The next report from Prasifka will cover a three-month window under the new regime, so the effect could be limited until it reports again in August.
Mr Prasifka said the industry needed to “up its game” in terms of handling consumer complaints.
“We think this is very important for the banks. In light of everything that has happened, their consumer branding and reputation is very important to them. That is all the more cause to devote more resources to complaints handling,” he said.
More staff
He said if the new rules worked properly, and prompted more banks to hire staff to handle customer complaints for fear of being named, it could take some of the pressure off the FSO.
The IBF said it fully supported the implementation of naming and shaming powers. “It gives greater transparency and will give rise to better complaints handling across the sector,” said its spokesman, Felix O’Regan.
Industry group Insurance Ireland said it also supported Noonan’s decision to give the FSO naming and shaming powers.
