Call for code that will prevent banks mis-selling to elderly
A CODE of conduct should be put in place to stop financial firms mis-selling to the elderly, the Consumers' Association of Ireland (CAI) said.
Firms that mis-sell to the elderly should also be named by the financial services ombudsman, the consumer representative body said.
The CAI said a code would clearly set out how banks and investment companies deal with elderly or vulnerable customers.
"Such a code would force banks and other providers to carry out mandatory extra checks when older or other vulnerable consumers," researcher Mark Channing wrote in 'Consumer Choice' magazine.
The Financial Regulator also needs to play a more active role by conducting mystery shopping exercises and other similar operations.
Where breaches are found, action must be taken by the regulator, the CAI said.
Banks and other finance houses that mis-sell to or mistreat older customers should be named.
This would require a change in the law.
Recently retired financial services ombudsman Joe Meade has written to the Department of Finance to ask for legal changes to be made to enable him to name repeat offenders.
Mr Meade repeatedly called on financial institutions to carry out a review of all investment products sold to elderly customers since 2006.
Last summer, he claimed the review was needed to ensure inappropriate products were not sold to the elderly.
He said that the review should be overseen by the new Central Bank.
Mr Meade said it appeared that many people were "preyed on" by financial institutions and that staff at the institutions had received nice commission from easy targets, many of whom were investing the proceeds of the sale of property during the boom, without knowing the intricacies of the products concerned.
The single biggest award went to two investors in their 70s, who were advised by a bank to take their life savings, which had been on deposit, and invest them in a managed fund.
But the fund experienced a heavy loss in value.
Mr Meade directed that the couple be repaid the full amount of their original investment -- €345,000.