Thursday 17 October 2019

New Banking Culture Board accused of coming down on the side of the banks

Aiming for culture change: IBCB chairman Mr Justice John Hedigan. Photo: Naoise Culhane
Aiming for culture change: IBCB chairman Mr Justice John Hedigan. Photo: Naoise Culhane
Charlie Weston

Charlie Weston

THE new Banking Culture Board has been accused of coming down on the side of the banks.

It comes after the banks had tried to use controversial time-limit rules when challenging complaints to the financial services ombudsman on tracker mortgages.

The banks subsequently made a u-turn and decided to stop challenging the ombudsman complaints using the time-limit argument.

This prompted the Banking Culture Board to issue a statement welcoming this.

The board is headed up by former High Court and Appeals Court judge Mr Justice Hedigan.

The retired judge was told the board had sided with the banks by issuing this statement welcoming the u-turn.

Mr Justice Hedigan was told at the Oireachtas Finance Committee the banks had acted illegally in trying to use time limits in the first place to stop the ombudsman dealing with tracker complaints.

KBC Bank tried to wriggle out of 27 complaints using the time-limit rule, while Bank of Ireland tired to use the time-limit rule to get 50 complaints dropped.

Financial Services and Pensions Ombudsman Ger Deering had told the Finance Committee in the summer that some banks were “rigorously challenging the jurisdiction of this office to deal with complaints where there is a question in relation to whether the complaint was made outside the time limit”.

Banks had been claiming the complaints went back so far they did not have to deal with them. This is despite the Central Bank asking the ombudsman to hold off dealing with complaints while it was investigating the tracker issue.

Sinn Féin finance spokesman Pearse Doherty said the banks had acted outside the law claiming there was an issue around time limits, legislation he had introduced to the Oireachtas.

Up to 2017 customers could only make a complaint within six years of the alleged misconducted took place.

But Mr Doherty’s legislation means customers can now make a complaint within three years of them becoming aware of alleged misconduct.

Mr Justice Hedigan told the committee he emailed the chief executives of the five main banks when he heard they were trying to use time-limits to avoid tracker complaints being handled by the ombudsman.

He told the committee he was pleased all the banks issued media statements saying they had decided to no longer use the time-limit arguments.

Mr Doherty told the retired judge that by issuing a statement welcoming the u-turn by the banks: “The board come down on the side of the banks. You did not call out the culture of the banks.”

He said the banks were making an argument that had not been decided on in a court.

“The banks were completely in the wrong here. As far as consumer centre behaviour and customer-focused approaches they were completely in the wrong.

“You need to be willing to call out the banks regardless of who is on the Banking Culture Board, and no matter who is funding you.”

The board is funded by the banks, and has five bankers on its board.

But Mr Justice Hedigan rejected the claim that his board had sided with the banks.

“We don’t come down on anyone’s side, other than the customer. I would not agree with you that we came down on the side of the banks.”

He said the legislation meant the ombudsman could not investigate a complaint unless the banks agreed it was within the time-frame for making it.

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