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Charles Prashaw, 25 May
OVER the past number of months, I’ve been interacting with a pension
provider on behalf of a client of mine who is disputing the amount that
was transferred into his pension. It’s got to the stage where they’ve
suggested in their most recent letter, his right to refer the matter to
the Financial Services Ombudsman, and that’s exactly what we’re going
to do.
I’m going to share with you what we can expect to encounter when we go
down this route and knowing what’s ahead might be useful for others who
are thinking of doing something similar, so I’ll outline how the
process works, what the timeline of events are etc.
But before I do, it was interesting to read recently that the number of
complaints lodged with the Financial Services and Pensions Ombudsman
(FSPO) last year hit a new record high.
There were 6,182 grievances filed with the FSPO's office last year
which was up nearly a third from the previous year.
Customer service problems were the most complained about and they made
up 24% of the total complaints, followed by maladministration, disputed
transactions and claims handling.
Almost two thirds of the issues related to the banking sector, with
insurance accounting for just under a quarter. 45% of complaints made
about banks related to accounts and 30% were connected to mortgages.
Investments made up 7% of all the complaints received, while pensions
were the focus of 5%.
And 85% of complaints made to the FSPO’s office last year were closed
within a year of the complaint being made, and the average time from
receipt of complaint to closure was 8.6 months.
Okay all good to know but whatever the reason for making a complaint
is, the process we have to follow is the same and there are a couple of
stages we’ll have to go through and I’m going to explain what they are
and what we and the organisation we are complaining against have to do.
And because there’s so much to cover I’ve digested them down to cover
the main points.
Stage 1
1. You must first have made a complaint to your existing financial
services provider
It’s important that you first let your financial service provider know
that you are unhappy. It’s best to put your complaint to them in
writing and keep a copy of your letter. You must give them an
opportunity to look into your problem and allow them to try to reach a
resolution.
2. Go through the provider’s complaint handling process in accordance
with Consumer Protection Code
According to the Consumer Protection Code a provider must seek to
resolve any complaints with consumers. That is why you must, in the
first instance, contact your provider, outline your complaint, and give
them a reasonable opportunity to deal with it.
Your financial service provider has 40 business days from the date you
notified them of the issue within which to attempt to investigate and
resolve your complaint.
If your financial service provider cannot resolve your complaint within
40 business days it must inform you of the anticipated timeframe within
which it hopes to resolve the complaint and must inform you that you
can refer the matter to the relevant Ombudsman.
Stage 2
If your complaint has not been resolved by the provider to your
satisfaction you can then proceed to lodge your complaint with the
office of the ombudsman. In order to lodge a complaint, you will need
to complete a complaint form and submit it along with the referral
letter from the provider. This referral letter is issued by the
provider when you have completed their internal complaints process
without resolution.
Setting out your complaint
When submitting your complaint form to the ombudsman it’s important
that you present your complaint in a clear and concise manner.
You should detail what has happened to date, and how you feel you have
a legitimate complaint. You should also suggest what outcome would
remedy the situation for you.
It's important you include letters to and from the provider, policy
documents, statements etc. as evidence to support your case.
And it’s worth mentioning at this stage that a six year limit normally
applies to all cases. This means the ombudsman will not investigate a
case arising from events that happened over six years ago.
Assessing a complaint
When the complaint form is received by the office of the ombudsman,
its’ assessed to determine whether they can accept it or not depending
on the law as prescribed by the Central Bank and Financial Services
Authority of Ireland Act 2004.
If the matter is deemed to be outside the remit of the Financial
Services Ombudsman's Bureau (i.e. they cannot deal with the complaint
by law), the complainant will be informed as to why it cannot be
investigated.
If the complaint can be accepted it will continue to the next stage of
the process which is to offer mediation to both parties to the dispute.
Mediation
After assessing your complaint and if the ombudsman can accept it, it’s
likely they’ll recommend mediation as the first and best option for
resolving the matter.
The aim of mediation is to give both sides the opportunity to develop a
shared understanding of the complaint and work towards reaching a
solution.
And if a complainant wants to bring a friend, relative, or
representative (paid or otherwise) with them to the mediation meetings,
they can.
Voluntary
Having said all of that, mediation is voluntary.
This means that both the complainant and the provider have to agree to
take part. And if both do, either can also end it at any time.
And any solution reached in mediation requires both the complainant and
the provider to agree.
Confidentiality
Mediation is an informal and confidential process, conducted in
private. Anything said during mediation and any document prepared for
the mediation, cannot be used in any later investigation of your
complaint, or in any legal action before a court.
The agreement
If the complainant and the provider agree a settlement during
mediation, what has been agreed will be written down.
Once it has been signed by both parties, that agreement becomes legally
binding on both the Complainant and the Provider.
This concludes the dispute, ending the complaints process.
If agreement is not reached
If either the complainant or the provider are not willing to take part
in mediation or if the mediation is not successful in reaching a
solution then the complaint will go to investigation and adjudication
where a decision is made by a different third party.
Costs
The office of the ombudsman provide the mediator and venue free of
charge but they do not pay any costs or expenses incurred by either
party in relation to the mediation process. This means they do not pay
any travel expenses for getting to and from the venue or any legal
costs or any other associated costs.
Investigation and Adjudication
If the mediation has not been successful or has been refused, the
ombudsman assigns an investigator to your complaint. It may take some
weeks before the formal investigation commences
Once a case has been approved for investigation, a timeframe in the
region of 6-8 weeks may apply before formal investigation of the
complaint will commence.
Summary of Complaint
In the course of investigation, the ombudsman will issue a Summary of
Complaint to the provider. The summary of complaint sets out the
complaint which is the subject of the formal investigation and requires
the provider to answer a series of questions, to submit evidence and
make any submissions which the provider sees as being desirable to put
before the Ombudsman to investigate and adjudicate upon the complaint.
The original summary of complaint and copy summary of complaint is
issued to the provider and complainant(s) respectively on the same day.
Finding
When the investigation is complete, the ombudsman will issue the
finding to the complainant and the provider.
And findings can only have three possible outcomes:
- Your complaint is upheld
- Your complaint is partly upheld
- Your complaint is not upheld
The finding is legally binding on the complainant and the provider.
This concludes the dispute, ending the complaints process.
High Court Appeals
A Finding of the Financial Service Ombudsman is legally binding on both
parties, subject only to appeal by either party to the High Court. A
party has 21 calendar days from the date of the Financial Services
Ombudsman's Finding in which to appeal to the High Court. It is open to
the High Court to extend the period of an appeal, if it considers in
its discretion that it should do.
Liam Croke is MD of Harmonics Financial Ltd, based in Plassey. He can
be contacted at liam@harmonics.ie or www.harmonics.ie