Tuesday 26 September 2017

Customers let down by banks and insurers, says watchdog

Ombudsman Ger Deering. Picture: Patrick Browne
Ombudsman Ger Deering. Picture: Patrick Browne
Charlie Weston

Charlie Weston

Insurance companies have been accused of wriggling out of paying claims by alleging that customers are not being upfront with them.

Banks have also been heavily criticised for denying consumers access to financial services.

Financial services ombudsman Ger Deering has found against banks that closed the current accounts of customers over false allegations there was a breach of money-laundering rules.

Insurers have also been accused of failing to pay out on claims by saying consumers had not disclosed all relevant facts when taking out the policy.

Presenting a review of consumer complaints dealt with last year, Mr Deering said he has seen a rise in banks and insurers telling customers they would no longer deal with them.

This has left people without banking services and left others unable to get insurance cover, as someone denied cover by one company is then rejected by the rest.

"I have been concerned to note, in a number of complaints to this office, the manner in which some banks and insurance companies either denied or curtailed services to customers," said Mr Deering.

"Access to certain financial services in the banking and insurance sectors is not a luxury.

"I will continue to pay attention to the conduct of banks and insurance companies to ensure that their conduct is fair, reasonable and proportionate."

Statistics released by the ombudsman show Ulster Bank had the most complaints upheld against it last year, followed by Irish Life, and then AIB.

Bank of Ireland Mortgages would be in joint second for the number of complaints upheld if Bank of Ireland and Bank of Ireland Mortgages were not listed separately in the table.

Mr Deering said a bank was ordered by him to pay €4,000 in compensation to a customer and refund fees after it denied access to online banking.

It is understood the customer had exceeded an overdraft limit and issued cheques that bounced. The bank had shut off the online banking option as a punishment, but allowed the customer to continue to use its branches.

Mr Deering said he was aware banks had to comply with anti-money laundering legislation but he warned them not to go beyond the limits of those requirements.

The ombudsman ordered an insurance company to pay €3,000 in compensation after it "unreasonably" denied a claim and cancelled the policy.

Mr Deering is concerned that insurance companies are increasingly resorting to saying a policy is invalid, and then refusing to pay out. They do this by alleging there was a non-disclosure of a key fact.

This might include an allegation that the consumer did not admit they had made a previous insurance claim.

A bank was also ordered to pay a customer €10,000 and issue an apology for freezing a bank account. This was done in "unfair, unreasonable and embarrassing circumstances", Mr Deering's report said.

A total of 4,334 valid complaints were received by the ombudsman last year.

The State body said 2,198 complaints were still active from the previous years.

The ombudsman operates a free dispute resolution mechanism for consumers and can award compensation of up to €250,000, and reverse decisions of finance companies.

Irish Independent

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