Ombudsman rule change to trigger a massive surge in complaints
A flood of complaints about banks and insurers is expected to hit the Financial Services Ombudsman after changes in the law.
The new legislation means consumers will be able to have a dispute resolved even if they bought the product more than six years ago. This is expected to benefit thousands of people.
Up to now, there was a six-year time limit on taking complaints. This meant that the Ombudsman had to throw out thousands of complaints relating to the mis-selling of mortgages, trackers and endowment policies.
The Central Bank and Financial Services Authority of Ireland (Amendment) Act 2017, which was championed by Sinn Féin's finance spokesman Pearse Doherty, has now been signed into law by the President.
A note on the Ombudsman's website states: "This legislation will have significant implications as it will amend the current six-year limitation period for certain types of complaints.
"Arising out of this change, this office expects to receive a large number of queries in relation to complaints which previously could not be dealt with by this office."
Up to 1,000 people every year are barred from the process because of the six-year rule.
The legal change will apply only to products or services that last for five years and one month, or more. This means it will apply to mortgages, life products and investment products wrapped up as life products. There is no six-year rule on pension products.
The legislation extends the time limits for complaints for long-term financial services to six years from the date of the conduct complained of, or three years from the date the complainant knew, or ought to have known, about the conduct.
Up to now, the Ombudsman had to throw out complaints if the product or service was bought more than six years ago.
Ombudsman Ger Deering, who is also the pensions Ombudsman, said about 3,000 complaints had been rejected since 2011 because of the six-year rule. In fact, the actual figure may be higher as others were advised not to complain because of the six-year rule.
Mr Deering said the change would apply to tracker-loss complaints.
The Ombudsman has 500 complaints on hold pending the Central Bank-directed probe into all lenders that offered trackers.