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Financial firms to be named for mistreating customers

BANKS and insurance companies that mistreat consumers are to be named and shamed for the first time.

Under a radical change in the law, the Financial Services Ombudsman will be able to name financial companies that have consistently breached consumer rights.

Ombudsman Bill Prasifka has repeatedly called for a change in the law to allow him to publish a list of the worst-offending companies.

This is already allowed in the UK.

In recent years, the ombudsman has uncovered a litany of cases where consumers have been badly treated -- including people in their 80s, who were persuaded to sign up for 10-year bond investments.

But until now, his office has never had the power to name the offending firms.

However, the Government is to accept a Bill, published by Fianna Fail, allowing a record of complaints against financial companies to be made public.

Finance Minister Michael Noonan has confirmed that the Government will back the change in the law.

"The move will allow Mr Prasifka to give details of the number and the types of complaints made against banks, insurance companies, stockbrokers, mortgage brokers, hire purchase providers, health-insurance companies and brokers.

He already compiles an internal league table of the worst offenders but this has never been published.

He revealed last month that there had been some levelling off in complaints after he forced troublesome firms to meet him and account for the high number of complaints they were generating.

Mr Prasifka's office received a total of 7,300 complaints in the second half of last year. However, while the level of complaints remains high, there was a levelling off of new complaints in February.

The ombudsman said: "After a number of years of record increases, 2011 showed a levelling off of new complaints but they still remain extremely high.

The change in the law would mean that consumers would be provided with key information on which companies were mistreating customers and this would help them avoid rogue operators.

Jeopardised

Fianna Fail's Michael McGrath said: "We have had cases of people's life savings being jeopardised through the mis-selling of investment products; of fixed-rate mortgage holders being misled about the implications of moving to a variable rate; and of insurance companies wrongfully seeking to withhold pay-outs to customers."

He added that there were now reports that thousands of customers had been wrongly sold payment-protection insurance from which they could never benefit.

He added: "The ombudsman should be able to fully highlight the culprits in all cases of such consumer abuse."

Former ombudsman Joe Meade first called for the naming and shaming of errant financial firms when he wrote to the Department of Finance for a change in the law in 2009.

Irish Independent