Extracts from the Submissions Received to the Department of Finance Proposals on the ‘Central Bank and Financial Services Authority of Ireland Bill (No. 2)’
Note! Edited Extracts (All Submissions can be viewed online at *****cbfsainumber(1 to 37, e.g. cbfsai2 leads to the CAI Submission 2 below).
Bold Underlining brackets except where otherwise noted ))
Submission by The Consumer Association of Ireland (CAI) [cbfsai2]
BACKGROUND
Over the past decade, regulatory organisations such as the Department of Enterprise Trade and Employment (DETE), self-regulatory organisations such as the Irish Brokers Association (IBA) and the Banking Regulator, and the Central Bank of Ireland, have collectively failed in their duty to protect consumers. Moreover, it is CAI’s view that the culture of giving significantly larger weight to the protection of business interests and prudential supervision, to the detriment of consumer protection, has continued right up to the present day.
In making this submission, CAI would like to remind readers that the work of the McDowell committee [presented in the McDowell Report] was undermined by an axis combining the Central Bank of Ireland and the Department of Finance in the development of a minority report.
Ultimately, this minority view has become the successful one in the current proposed model for the Irish Financial services Regulatory Authority (IFSRA).
Unhappily, it is clear that (IFSRA) for all intents and purposes will remain an arm of the Central Bank of Ireland, making any possibility of the development of a new, pro-consumer culture, improbable. ……
The interim board of IFSRA does not contain any consumer representation, highlighting CAI’s concerns that there will not be equal balance between prudential supervision, i.e. industry interests, and consumer protection.
It is CAI’s view that when hard decisions are needed the emphasis on consumer protection will be seen for what it is, i.e. tokenism.
The make-up of the interim board has the footprint of the axis between the Central Bank and the Department of Finance.
It contains two members from the Central Bank, an employee of the NTMA attached to the Department of Finance, and a former chairman of the Revenue Commissioners.
It contains a journalist, with no apparent past record in consumer campaigning, a former director general of the industry lobbyist IBEC and a former general manager of Standard Life, who spearheaded a campaign against criticism of endowment mortgages.
Consequently, this submission from CAI needs to be read against this backdrop. …..
Nevertheless, in dealing with the reality which has emerged, CAI makes a submission, despite the record of it falling on deaf ears at the Department of Finance and the Central Bank of Ireland.
FINANCIAL SERVICES OMBUDSMAN
CAI has campaigned for the establishment of a statutory Financial Services Ombudsman scheme to replace industry funded schemes, which are inevitably compromised by the source of their finance and the setting of their terms of reference. In particular we have long been unhappy with the narrow terms of reference and the position of the Insurance Ombudsman scheme.
Consequently, we believe that the statutory Financial Services Ombudsman should be a substitute for existing schemes, and that no accreditation scheme should operate within the Financial Services Sector. …..
It is the practice of some authorised businesses to drag out complaints and wear down the consumer, before issuing a “signing off letter”, allowing the case to be presented to the Ombudsman. The tactics of delay, ultimately right up to the steps of a Court, is a long used and successful tactic within the financial services industry. …..
…. CAI suggests that the Financial Services Ombudsman should be the receptacle for complaint resolution, but that IFSRA should use its investigative powers as soon as a complaint arises in order to investigate the authorised business itself, if the complaint is serious enough to warrant such action.
…. in addition, the consumer could also see the over-arching regulatory authority, IFSRA, separately undertake an investigation of the firm about whom the complaint is presented, assuming that the nature of it warrants such investigation. …..
UNFAIR TERMS
Unhappily, financial services firms have had a long history of engineering financial products that contain unbalanced and unfair terms to consumers. Perhaps the most salient example has been the behaviour of the Irish Nationwide Building Society and the lack of any action by regulatory authorities in connection with its homeloan mortgage product, allowing the Society to vary interest charges as well as to attach extraordinary surcharges in excess of 20% p.a. to late payments.
SANCTIONS
…. Fines need to be of a scale which would impact on the balance sheet of an authorised business, otherwise they are of little use. These should not be flat but linked to turnover or revenues. The magnification effect however of publication of a fine in the national media should not be underestimated. One of the critical functions of IFSRA will be to ensure that findings against financial firms are subject to publication.
When there are findings of serious misconduct and fraud relating, specifically, to the negligence of the board of an authorised firm, we suggest that penalties may also be directly imposed, past the corporate structure, and on to the Directors themselves.
Financial services firms, more than any other, have an extra duty of care to consumers given the scale of assets placed at their disposal and the general lack of knowledge amongst consumers about the complexity of financial services.
Where wilful neglect, misconduct or negligence has occurred, directors of authorised businesses must be held personally accountable.
In the past, various financial regulators have been reactive to changes after they have happened. There has been little evidence of proactive investigation of authorised firms as a matter of routine. …..
CONFIDENTIALITY & THE FREEDOM OF INFORMATION ACT
….. Consumers must have the right to apply the Freedom of Information to IFSRA on all and any aspects dealing with their own affairs and financial services firms.
Submission by The Council of the Credit Institutions’ Ombudsman [cbfsai3]
…. In reiterating points already made in our submission of January 2001, and our letter of 9th May 2001 to the department, the Council does not wish to appear unsympathetic to the objectives set out in the Heads of the Bill.
On the contrary, it is because we so strongly believe that a scheme which has patently worked to the advantage of the consumer should not lightly be discarded in any new legislation that we are willing to offer our best advice in seeking a satisfactory working relationship between the present Credit Institutions’ Ombudsman and the proposed new Financial Services Ombudsman. …..
The existing scheme has shown to date its adaptability in having its terms of reference amended to meet changing circumstances …..
The continuation of the scheme in its present form will, in the Council’s view, avoid overloading the Financial Services Ombudsman’s office with a substantial burden of what might be considered ‘ordinary’ or routine unresolved complaints …..
The Council, in its submission to the Department of Finance in January 2001 emphasised the cost-effectiveness of the scheme; the fact that its operations over a considerable period of time had attracted no unfavourable comments or criticism from any source; ….
The experience of twelve years of operation of the existing non-statutory Ombudsman scheme for the Credit Institutions strongly favours its retention under any new scheme to be incorporated under the Central Bank and Financial Services Authority of Ireland Bill 2002. …..
…. the Council believes that the existing arrangements provide a fast, confidential and effective method of dealing with the normal pattern of complaints against the financial institututions. …..
The Council’s concern throughout the current debate has been the interest of consumers.
Submission by Brendan Burgess FCA [cbfsai4]
…. The Ombudsman’s decision should be final. …..
The Consumer Director should be proactive. …..
The determination should be final on both parties. …..
The legislation must provide for the Ombudsman and IFSRA to name and shame. Up to now, the Ombudsman’s annual report details the findings anonymously. Certain institutions probably have more complaints than others – the bad and the good should be publicly identified.
Submission by Limerick Money Advice and Budgeting Service (MABS) [cbfsai7]
THE OMBUDSMAN & IFSRA CONSUMER DIRECTOR
…. The Ombudsman should have the necessary powers to conduct investigations and his/her findings should be binding on the parties except where points of law arise in which case there should continue to be access to the Courts. …..
The Consumer Director of the IFSRA should act as a conduit for communication between financial service provider and consumer in relation to matters of general concern.
Submission by John F Brennan – Bank Shareholder [cbfsai11]
…. The primary purpose of making this submission is to focus attention on the critical need for legislation in respect of statutory empowerment and protection for bank officials who find themselves “potentially compromised” by a situation which compels them to choose between “colluding with” or “confronting” malfeasance and/or professional misconduct. …..
The Public Accounts Committee DIRT (Direct Income Retention Tax) Report contains the following recommendations:–
- that the IFSRA address …. ethics, professional standards and corporate governance in the provision of financial services in Ireland.
- that detailed rules and requirements in relation to the … duties of directors of financial institutions … be proposed for the IFSRA … and, very importantly,
- that a scheme and procedure for “bank officials” to report suspected wrongdoing to be drawn up and put in place.
Submission by The Irish Bankers’ Federation (IBF) and the Irish Mortgage and Savings Association (IMSA) [cbfsai14]
Our comments are informed by the principles set out in our Report ──
‘An Industry View of the Principles which should Govern the Operation of the
Irish Financial Services Regulatory’
copies of which were forwarded to the Department earlier this year, ── and on previous submissions in relation to the Financial Services Ombudsman.
In general terms we are strongly of the view that the existing Credit Institutions Ombudsman Scheme should be retained and we are pleased to note that there is provision for this within the Heads of Bill. We are willing to discuss changes to the existing Terms of Reference in order to facilitate this. We believe the voluntary scheme has worked well for over 10 years and no compelling evidence has been put forward to the contrary.
…. we still see the need for industry bodies such as ourselves to be able to continue to directly consult with the Regulator on matters of concern to our respective members. …..
The requirement to advise Revenue of suspicion in relation to Revenue offences is not practical. The Institutions have already sought guidance from Revenue, at the Money Laundering Steering Group, as to what distinguishes a Revenue offence from any other money laundering offence and Revenue was unable to provide a workable definition. Furthermore, all suspicious transactions are reported to the Gardai. There is no justification for asking institutions to prepare a separate report on a sub-set of this information for transmission to a different arm of the State. We believe that the Gardai should be asked to fulfil this function and pass on all information in relation to Revenue offences to the Revenue.
We have a difficulty with the proposed Disclosure Notices in that institutions will have to publish notices in their Annual Reports on the basis of a suspicion that they may have done something illegal. We would like to discuss the sorts of situations this provision is meant to cover. …..
…. No comment was sought in relation to Head 43 which effectively does away with self regulation in all areas of the industry. Over the years the industry has produced various Codes of Practice for its members. Some of these were produced at the behest of the Bank or the Director of Consumer Affairs; the Code of Ethics was produced as a response to the PAC Recommendations; the Euro related Codes were produced at the behest of the Changeover Board while others were the result of EU wide initiatives at the behest of the Commission. In addition, Compliance Guidance Notes to our members have been produced in a range of areas such as Money Laundering, Data Protection, the Equal Status Act etc. All of these are voluntary Codes produced by the industry and are policed by the Ombudsman for the Credit Institutions. They have provided valuable protection for clients and have provided comfort to regulators. It is now proposed to effectively dismantle this voluntary system totally and replace it with a statutory system complete with a regime of offences and fines. It is our view that there are areas where this approach is not appropriate and that it should only be resorted to where the voluntary system has failed. Copies of the relevant Codes and Guides are included for information.
Our comments on the specific questions raised in the consultation Document and our specific comments on the Heads of Bill are included in the attached appendices [extracts below]. The comments on the Financial Services Ombudsman have been agreed with the Board of the Ombudsman Scheme.
We would welcome an opportunity to discuss these issues with the relevant Department Officials.
Yours sincerely,
James Bardon Eimer O’Rourke
Director General. Secretary
Irish Bankers’ Federation Irish Mortgage and Savings Association.
FINANCIAL SERVICES OMBUDSMAN
…. As far as the Banking Industry is concerned there is an integrated scheme in place for the reception and resolution of complaints from customers in a timely and cost effective manner. …..
We have consistently argued that it should be possible to retain the existing schemes within the new framework.
The benefits of doing so include retention of knowledge and expertise, proven operational arrangements, brand recognition (by consumers, regulators and the industry) and an excellent track record in handling complaints. The retention of the existing schemes also has the advantages of building on the specialisation by sector (insurance and banking separately) and provides continuity from the point of view of all stakeholders including consumers.
We believe that the existing Credit Institution Ombudsman Scheme provides a level of protection to consumers that a statutory scheme will not be able to replicate and that the consumer could end up worse off. …..
We believe that the Financial Services Ombudsman should be able to recognise (or license) existing schemes for a period of time (say five years) provided their Terms of Reference meet certain minimum criteria.
We are willing to look at Terms of Reference of the Credit Institutions Ombudsman Scheme with a view to taking on board suggestions for improvement.
….. In the event that agreement is reached on retention of the existing scheme our members would, of course, continue to honour all awards. We would have no difficulty with the concept of a single gateway for complaints but we believe banking complaints should be referred automatically to the Banking Ombudsman. …..
….. the existing scheme would be happy to provide statistical and analytical data to IFSRA in order to enable them to be fully briefed as to the types of complaints that occur on an ongoing basis.
Our views, and the views of the Board of the Credit Institutions Ombudsman Scheme, on the issues raised in the consultation document are as follows. …..
Is the proposed arrangement (confirmation by the High Court) for dealing with Ombudsman determinations that are disputed by a financial institution acceptable?
If it is proposed to proceed with a statutory scheme where the determination of the Ombudsman is binding on the institution and non-binding on the complainant then, constitutionally, an appeal mechanism for the institutions is required.
What (if any) formal recognition should be given to the industry Ombudsman schemes? Alternatively, should they be absorbed into the statutory scheme?
Our view is as outlined in the introduction and in previous submissions. In our view the Redress Procedures in place are “not broke” and no compelling case has been put forward for “fixing it”. …..
Should there be any restriction on the type of complaints against a financial institution that can be dealt with in terms of either (i) the nature of the complaint, (ii) the person/corporate entity making the complaint (iii) when the events giving rise to the complaint happened?
There should be restrictions on the scheme. A copy of the Terms of reference of the existing Credit Institutions Ombudsman Scheme is enclosed for information. ….. [8888888 Comment]
(i) Individual institutions are free to set their own commercial policies in relation to interest rates, lending policy and within the confines of Section 149 of the Consumer Credit Act, 1995, prices. Issues relating to these policies and to commercial judgement (for example individual lending decisions in line with the institution’s commercial policy) should not be subject to the Ombudsman. ….. Complaints which are already the subject of legal proceedings or are more appropriate for legal proceedings should also be excluded.
(ii) The service should be confined to consumers and SME’s.
(iii) The service should not be retrospective.
CONSULTATIVE PANELS
…. The proposed structure will, presumably, provide each sector of the broader Financial Services Industry with a voice at the table, through nomination to the Panel.
However, many of the issues will be sector specific and the sector representative bodies should be deferred to on these issues. For example, in Banking issues IBF would wish to have its views heard and those views should carry more weight on Banking Issues than say those of the Irish Brokers Association (and vice versa). …..
PROVISION OF INFORMATION TO ENFORCEMENT AUTHORITIES
…. What is proposed places additional obligations on institutions and their external auditors to certify compliance with existing regulatory and legislative requirements. There is a danger that this process could undermine the resolve of the regulator to perform its own due diligence in respect of the entities it regulates and supervises.
Is there a danger that the provisions could be misunderstood as giving IFSRA a general policy role in relation to compliance by financial institutions with statutory obligations for which other regulatory/enforcement authorities (Revenue Commissioners, Director of Corporate Enforcement etc.) have responsibility?
Yes. As currently defined the requirement relates to “matters likely to be material” to another authority in relation to its function. The definition is so wide as to encompass everything. A better route would be to leave the existing money-laundering arrangements in place. This requires the institution and IFSRA to report suspicions to the Gardai. They are better placed to decide whether the suspicions are well founded and if they are they can pass them on the relevant enforcement authority. There is then no role confusion. In any event the Revenue Commissioners have extensive powers available to then under the various provisions of the Taxes Consolidation Act, 1997.
Is the suggested “Disclosure Notice” and “Special Compliance Report” system an effective way of dealing with situations where direct reporting by IFSRA to another statutory body is not possible due to confidentiality provisions in EU Law? Are there better alternatives?
This proposal is neither workable nor acceptable. Firstly, while the definition is widely drawn, there is no requirement for even prima facia evidence that an offence has been committed. Yet the institution is forced to place a Disclosure Notice in its Annual report. The second problem is that the proposal is a deliberate attempt to circumvent existing EU confidentiality laws. No rationale has been put forward for such far- reaching changes.
We would suggest that the reporting of suspicions under the Money Laundering regime should adequately cover the situation. In any event we believe that the requirement to publish the “Disclosure Notice” should be dropped. It should be sufficient to alert the other body that the notice has issued. The other body can then follow up using its own powers.
COMMENTS ON HEADS OF BILL
FINANCIAL SERVICES OMBUDSMAN
We would like to be consulted on the Terms of Reference of the Ombudsman prior to their finalisation.
We welcome the proposal to make provision for the retention of the existing Voluntary Schemes within the proposed framework and have commented separately in the Comments section of our response.
CONSULTATIVE PANELS
Our main concern is to ensure that the views of the Banking Industry on banking matters are heard and afforded proper consideration. To this end we wish to be able to discuss banking matters directly with the Regulator….
AUDITING OF ENTITIES REGULATED BY THE CENTRAL BANK AND FINANCIAL SERVICES AUTHORITY OF IRELAND (IFSRA)
Under Head 29: **********
The concept of allowing third parties, which may have no competence in, or statutory authority for, the supervision of financial services providers, to request such reports is considered a dangerous and unacceptable development. The supervision of financial services providers, and any reports required in this respect, should be the sole responsibility of the body/bodies given responsibility in this area, and no other parties.
Moreover, because of the very general reference to “any other authority responsible for the enforcement of law or the regulation of commercial activity” it is not clear which agencies/authorities fall under this provision. For example, would An Garda Siochana (which is responsible for the enforcement of law) or the Irish Stock Exchange (which regulates commercial activity) be considered to fall within such definition?
CONFIDENTIALITY
Head 37: Transfer of information by regulated entities and IFSRA to Enforcement Authorities
We are opposed to the proposal for dual reporting of suspicions in relation to Revenue offences. We would suggest that subsection (3) be amended by substituting the “Gardai” for “financial institutions and IFSRA”.
MISCELLANEOUS AMENDMENTS AND APPEALS
Head 43: Amendment to Section 117 of the Central Bank Act, 1989
…. By implementing this subsection the authorities would be automatically downgrading the value of self-regulation. …..
We believe that there is a place for self-regulation and voluntary Codes within the new regime and that what is required is to ensure that there is no confusion in the minds of consumers as to what is obligatory and what is voluntary. We would therefore like to discuss this issue further.
*************Of course, in the minds of the IBF — compliance with all common law obligations were to be taken as voluntary!!!!!!!!!!!!!!!!!
Submission by The Competition Authority [cbfsai15]
INTRODUCTION
…. In particular, the Authority has concerns relating to the proposed consultative panels, the provisions relating to the information exchanges between enforcement authorities …..
THE CONSULTATIVE PANELS
…. Underpinning the philosophy of market regulation is consumer protection. Firms are generally a focussed and well-resourced group, skilled in representing their own needs and interests. In contrast, consumers are generally a diffuse and amorphous group and consequently are often unable to represent their interests effectively.
For this reason, the Authority wholly welcomes the provisions in the Bill relating to the consumer consultative panel, but has grave reservations about the industry consultative panel.
INFORMATION and ENFORCEMENT
…. The Authority recognises the danger that the provisions in the Bill could be misunderstood as giving IFSRA a general policing role in relation to compliance by financial institutions with statutory obligations for which other regulatory/enforcement authorities have responsibility.
To avoid this danger, some of the provisions might be re-worded in a way that makes it clear that it is not the function of IFSRA to seek out breaches of the law for which other agencies have responsibility, but that it has a duty, where such breach comes to its attention, to bring it to the notice of the proper authority. …..
Submission by The Insurance Ombudsman Council[cbfsai16]
[INTRODUCTION]
….The role of the Insurance Ombudsman is to provide an independent dispute investigation/resolution service for complainants who are personal policyholders of member insurance companies. While the [Insurance] Ombudsman has regard to the terms of the insurance contract, the terms of reference, all applicable rules of law, relevant judicial authority and general principles of good insurance practice she is obliged to exercise her discretion in a fair and reasonable manner. …..
…. The functions of the [Insurance] Ombudsman are firmly grounded in the Terms of Reference. …..*********************
OBSERVATIONS on the Central Bank and Financial Services Authority of Ireland Bill, 2002
…. We do not favour the operation of a parallel statutory ombudsman scheme — at additional cost to consumers and shareholders — which would replicate what our Office has done well for a decade. …..
We would prefer a positive legislative basis to ensure the right of our scheme to continuing its customary work.
Submission by The Free Legal Advice Centres Ltd. [cbfsai17]
Should the Industry Ombudsman continue? [*** Previous lobbying by XXXXX is clearly evident within the content of these submissions 8888 ]
…. It is apparent at this stage that the industries themselves are campaigning to retain their Ombudsman role to run parallel with the statutory one. We cannot see the sense in this apart from the pursuit of self-interest. …..
In our view, the establishment of a Statutory Ombudsman obviates the need for industry ones. …..
Relationship between the [Consumer] Director and the Ombudsman
In our view, the two offices can work closely together in relation to the development of a strong consumer culture in the area of financial services.
However, very clear lines of demarcation between their respective roles should be in place.
The [Consumer] Director should have a specific watchdog role in relation to consumer protection legislation in the area of financial services including a supervision, inspection and potential prosecution role as well as a general obligation to promote high standards in consumer protection and education. …..
Submission by The Dublin Funds Industry Association [cbfsai20]
…. Provision of information by IFSRA to other enforcement authorities (Heads 36 & 37)
It is proposed that IFSRA will have reporting duties to the Director of Corporate Enforcement, the Revenue Commissioners, the Garda Siochana, the Competition Authority or any other authority responsible under law for enforcement. We are concerned as to how this may work in practice and the impact this may have on Ireland’s competitiveness as an International funds centre. ***********Comment
Submission by The Professional Insurance Brokers Association (PIBA) [cbfsai21]
…. Our members act as intermediaries for a range of financial products including life assurance, pensions, lump sum investments, mortgages and non-life insurance. …..
We submit that it would be preferable to maintain and integrate the current industry Ombudsman schemes, e.g. Insurance Ombudsman, into the overall Financial Services Ombudsman scheme …. Industry schemes could act as an effective blocker of mundane day to day type complaints …..
We would also submit that the scope and remit of the Financial Services Ombudsman scheme should not be retrospective to events which happened before the scheme is introduced. …..
Submission by The Office of the Director of Consumer Affairs (ODCA) [cbfsai27]
ODCA is of the view that the processing of complaints should be the expressed responsibility of the Ombudsman. …..
ODCA strongly feels that it is essential that, notwithstanding the independence of the Ombudsman in the exercise of his/her functions, there should be comprehensive liaison between the Ombudsman and the Consumer Director. The Office is of the view that one of the major failings in the current voluntary schemes is the fact that the Ombudsman’s experience of processing complaints is not communicated to policy makers.
ODCA feels, therefore, that only by establishing a formal liaison between the Ombudsman and the Consumer Director will it be possible to ensure that IFRSA and by extension the legislators are fully au fait with the current consumer issues/problems. …..
ODCA fully supports the provisions in the Bill obliging IFSRA to report suspected/possible breaches of the law to whichever statutory agencies have responsibility for enforcing the particular law in question e.g. Revenue, Competition Authority, Gardai, Office of the Director of Corporate Enforcement etc.
ODCA would support the concepts of “Disclosure Notices” and “Special Compliance Reports” as provided for in the Bill.
Submission by The Irish Stock Exchange [cbfsai28]
Information to Enforcement Authorities
Money laundering is a key concern to all financial institutions and is an area where institution’s detection measures, controls and indeed awareness have improved dramatically over the last five years. The present provisions for direct notification of suspicions to the Revenue as well as to the Gardai are a step beyond the existing identification and reporting provisions in place which are centred on the Garda Bureau of Fraud Investigation’s Money Laundering Unit. [88888888888888 Comment]
Submission by The Irish Brokers Association [cbfsai29]
…. IBA brokers are the primary distribution channel for General insurance and Life and Pensions business in Ireland …..
IBA supports the formal recognition of the existing Insurance Ombudsman scheme and its incorporation or retention within the future regulatory regime.
A proposed statutory Ombudsman scheme is likely to prove more costly to administer and it is likely that the resolution of complaints would be more protracted than under the existing scheme.
What complaints should be dealt with?
IBA considers that there should be some requirements regarding the:
Nature of the complaint ── direction should be taken from existing Insurance Ombudsman Terms of Reference. [Comment **********]
Time limit regarding submission of complaints ── the scheme should not be retrospective and there should be a time limit for submission of complaints.
Submission by The Irish Insurance Federation (IIF) [cbfsai31]
[***** Explanatory Note!! Code of Conduct — Insurance Ombudsman — control]
FINANCIAL OMBUDSMAN SERVICE
We are aware (****** be sure they are *88) that the Insurance Ombudsman Council is making its own submission in relation to this part of the Bill, and we defer to the Council’s views in respect of technical aspects of the operation of existing and potential Ombudsman schemes. …..
We believe that the existing Insurance Ombudsman scheme …. should be encouraged to grow and develop. …..
We consider that the legislation should provide that complaints against members of accredited schemes should be referred to that scheme, rather than providing for an ad hoc decision to be made by the Financial Services Ombudsman …..
The desirability of providing a single point of contact for all complaints on financial services is acknowledged. However, of itself this is not a compelling reason to impose a statutory Ombudsman scheme, to the exclusion of the existing voluntary schemes, which have built up an acknowledged reputation for expertise and equity in examining consumer complaints. …..
CONFIDENTIALITY
Head 37(3) provides for financial institutions and IFSRA to report suspicions of money laundering to the Revenue Commissioners rather than to the Gardai. This would not appear to be relevant in the case of overseas customers of Irish institutions, and perhaps some thought could be given to exempting such cases from this change of procedure. …..
Submission by The Interim Irish Financial Services Regulatory Authority (Interim IFSRA) Insurance Federation [cbfsai32]
[***** Explanatory Note!! Set in context of what had come to light in the U.K. — remember make-up of Authority and that the Interim is to become the Actual — inluence/control]
…. the interim Authority believes it would be useful for it to provide a provisional set of comments on some of the many issues of direct concern to consumers posed in the Minister for Finance’s consultation document. This reflects the importance the interim Authority places on continuing to increase the focus on consumers in financial services regulation.
[CONSUMER DIRECTOR]
The Authority believes that the role of the Consumer Director in relation to matters likely to be the subject of complaints is to monitor competitiveness in the sector from a consumer point of view, develop consumer education, identify bad practice on an industry-wide basis …..
For this approach to work two things appear necessary:–
| 1) | clear terms of reference for the Ombudsman so that matters which fall within these terms of reference would be dealt with by the Ombudsman while matters which fall outside those Terms of Reference would be dealt with by the Consumer Director, and |
| 2) | the strongest possible arrangements for the exchange of information between the Ombudsman and the Consumer Director and for reporting of individual complaints to the Consumer Director (who would be subject to the same obligations in relation to holding personal information confidential as the Ombudsman). |
[FINANCIAL SERVICES OMBUDSMAN]
Should there be any restriction on the type of complaint against a financial institution that can be dealt with in terms of either (i) the nature of the complaint (ii) the person/corporate entity making the complaint (iii) when the event(s) giving rise to the complaint happened?
It is not a matter of ‘restricting’ the type of complaint that can be dealt with but of ‘defining’ the type of complaint that is to be dealt with. It should not be the purpose of any such statutory definitions of the type of complaint to be dealt with to restrict legitimate complainants from making use of the service. In IFSRA’s view, however, the definitions should be clear and can be very broadly drawn.
Such Terms of Reference would need to be tested and kept under review to establish whether there were complaints where the Ombudsman could be of assistance which fall outside these terms of reference.
If the Ombudsman is to be the main complaints-handler, how can we ensure that IFSRA is conscious of the concerns of consumers when carrying out its day-to-day supervisory work?
How can the new regulatory system be best geared up for the task of learning lessons from patterns of complaints?
The proposal that the Ombudsman’s Office could be staffed wholly or in part by staff seconded from the Central Bank and Financial Services Authority of Ireland (CBFSAI), of which IFSRA is a part, certainly creates a strong linkage between IFSRA and the Ombudsman’s Office. This should lead to a ‘virtuous circle’ where experience from dealing with complaints is fed into the regulatory process. IFSRA recognises that this proposal has been made with a view to further strengthening the focus on the consumer within the regulatory process. …..
IFSRA is concerned, looking at the matter from the point of view of the consumer, that the involvement of CBFSAI staff might be thought to affect the culture of the Ombudsman’s office.
….. consideration should be given to putting in place legislative requirements for formal advisory reporting from the Ombudsman to the Consumer Director in order to ensure that the Ombudsman’s experience is fed into the work of the Consumer Director. …..
8888888 No comment on ‘Disclosure’ proposals!!!!