Thursday 27 June 2019

Secrecy rules allow bullying banks get away with too much

Comment

Bill Prasifka. Photo: Gerry Mooney
Bill Prasifka. Photo: Gerry Mooney
Charlie Weston

Charlie Weston

OFFICIAL Ireland's obsession with secrecy has much to answer for when it comes to how our banks, credit card companies and insurance firms operate.

Drop the secrecy - and all of a sudden consumers do better.

That is certainly the conclusion to be drawn from the move by the Financial Services Ombudsman to start naming and shaming errant banks and insurers and other finance firms.

All of a sudden, they start to settle disputes with consumers, leading to fewer complaints against them having to be decided upon by the Ombudsman.

In September 2013, ombudsman Bill Prasifka got the powers to name and shame firms that have at least three complaints upheld or partially upheld against them in a 12-month period.

And hey presto! The number of complaints received by the Ombudsman's Office last year fell like a stone dropped from the top floor of a bullying bank.

Just short of 4,500 complaints were received last year, down 42pc on the 2013 number of complaints.

This just shows that financial firms have been dodging treating consumers fairly as there was little consequence for them to fight, and fight hard, when an ordinary customer took the fight to the Ombudsman.

And for years we were told that it was not possible to name banks and other financial firms without naming consumers who had made the complaint.

This move for openness and transparency is small in itself but it has levelled the playing field in what is a crazily unequal battle between big institutions and consumers, who for the most part are amateurs in the ways of finance.

The lessons could and should be learned by the Central Bank and legislators.

Especially during the boom years, when journalists knew that insurers and banks were up to no good, the regulators would give away little or nothing, instead quoting the stipulation in section 33AK of the Central Bank Act 1942 which prohibits the naming of institutions it may be probing.

This response is not unusual: "Under the confidentiality requirements as specified under Section 33AK(8) of the Central Bank Act 1942, we cannot comment on the specific details of the investigation into affairs at Bloxham."

Section 33AK was regularly trotted out when journalists asked awkward questions about Anglo Irish Bank, Irish Nationwide and Quinn Insurance during the bubble years.

The 33AK section is still in place, and still obscuring what is happening in the financial world.

We would be much better off if it was not there.

That would be especially useful when it comes to how badly banks are dealing with mortgage arrears.

More sunlight would be a great disinfectant for the stained financial sector in Ireland.

Twitter: @CWeston_Indo

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