Banks with the worst customer complaints named and shamed
BANKS have been named and shamed for the first time for their poor handling of customer complaints.
The banks publicly identified by the Financial Services Ombudsman include AIB, Permanent TSB, Ulster Bank, Bank of Ireland, Bank of Scotland and Danske Bank.
The six all feature in the top 10 financial institutions that were the subject of most complaints by customers in the last three months of last year.
Bank of Scotland is no longer operating in this market but still has mortgages here, while Danske is pulling out of retail banking here.
The revelations come after Ombudsman Bill Prasifka got new powers in September to name and shame errant institutions.
This prompted a rush by banks and other finance firms to settle claims made by consumers to avoid the glare of bad publicity.
If this had not happened, it is thought that were would have been far more than the 165 from 15 different banks and finance firms that were named for the first time.
Mr Prasifka said: "It has been our experience since September, that many FSPs (financial service providers) have sought to more actively manage their complaints handling as a result of our ability to identify the complaints record of individual FSPs.
"This is a positive outcome for consumers and is to be welcomed."
Campaigners had been seeking powers for years to have finance firms named when they get large numbers of complaints.
The company that took over credit card company MBNA, Avant, ended up topping the league of shame with 33 complaints upheld against it, or partly upheld, in the last three months of last year.
All complaints were about payment protection insurance, often sold to people who did not need it, and sometimes consumers were unaware they had it.
The Central Bank has told Avant and 10 other institutions to review their sales of payment protection policies.
Last October, it emerged that €25m was being returned to customers of 11 financial institutions after it was found that one in five of the policies had been sold in breach of Central Bank rules.
The Central Bank was reviewing 350,000 PPI policies that had been sold in the country since mid-2007.
AIB ended up as the second most complained about institution in the ombudsman's new league table. Most of the complaints relate to mortgages, or loans.
Mortgages and credit cards prompted complaints about Permanent TSB, with Bank of Ireland losing cases taken to the ombudsman over mortgages.
Mr Prasifka said the repayment terms being offered by banks to those in trouble with their home loans was a concern to his office.
Mortgage arrears and payment protection insurance complaints topped the list of most contentious issues for consumers.
Mr Prasifka said he expected to continue to receive huge volumes of complaints about mortgages.
But the overall number of complaints his office received in the second half of last year was down by one-third to just over 3,000.
The ombudsman said this was due to a new approach from his office to encourage finance firms and consumers to resolve complaints before he has to make a determination.
Mr Prasifka's office offers a free dispute resolution service, but his findings are legally binding.
He said: "This new approach has resulted in a 35pc decrease in complaints being made to the financial services office."
But the ombudsman's report for the second half of last year shows that consumers lost out to finance firms in seven out of 10 cases taken.
The fact that banks, insurers and card providers won so many cases was down to the new naming-and-shaming legislation, he said. This meant the finance firms did not allow cases they feared they will lose go to the ombudsman for a determination.