A New Climate - Financial Services Ombudsman, Ireland BIOA Loughborough University 13 May 2011 Mr William Prasifka

Background to FSO Established in 2005. Successor to voluntary ombudsman schemes for credit institutions and the insurance sector in early 1990s. Statutory Basis – Findings legally binding.

Power of the FSO Investigate /Adjudicate complaints Award compensation up to €250k Direct Rectification (effect compensation + €250K) Findings - legally binding, appealable only to the High Court Accessible & Free Service to the Consumer

Standard of Adjudication “The FSO ... is required to act in an informal manner and according to equity, good conscience and the substantial merits of the complaint without regard to technicality or legal form.” Therefore, FSO guided, not bound by regulatory codes & law

The New Climate

Growth Rates The New Climate

Overall Complaints to FSO 3,795 4,374 5,974 7,619 7,230 8,000 The New Climate

Drivers of Complaints Investments Payment Protection Insurance Mortgage Protection Insurance Mortgages Other The New Climate

Findings 2010

Compensation Awarded 2010 18% 58% 24%

Courts hold FSO to High Procedural Standard Substantial experience before the Courts Full exchange of submissions & opportunity of parties to respond Procedures / investigation must reflect the remedy directed Request for discovery and jurisdiction must be fully considered

The Response

Complaints Process High Level map of the FSOB complaints process. Provider Final Response Letter Comment Complainant Comment Complete Complaint Form Write to provider Initials Assess Remit Offer Mediation Send Complaint Form Prompt Investigators Prepare and send Summary Exchange of documents Complete Findings Signatory Allocate Sign and send 13 13

Cases on Hand Cases ‘stall’ at certain points in the process . There are three major ‘stalling’ points in the process; Awaiting the final response from the provider (Stage 2) Awaiting allocation /summary (stage 5) Awaiting Decision (Stage 7) 14 14

Manage Cases Identify bottlenecks Target resources Streamline process for specific types of complaints Invest in Decision Making

Stakeholder Engagement Facilitate settlements Transparent predictable decision making Active engagement Industry fora Mine complaints for trends Industry must internalise our methodologies

Goal To adjudicate on unresolved disputes between complainants and financial services providers in an independent and impartial manner thereby enhancing the financial services environment for all sectors.

Thank You www.financialombudsman.ie