High time for the cowboys to be driven out of town
FINANCIAL Services Ombudsman Joe Meade has shone a light on the unsavoury practice of banks and other finance houses targeting older people for the sale of the wrong sorts of products.
Mr Meade last week warned finance firms that targeting older people for the sale of inappropriate products would not be tolerated.
But he is not in a position to sanction firms engaged in this practice; that is the job of the Financial Regulator.
This mis-selling is shameful and it would be heartening to see firms engaged in it chased down by the Financial Regulator and heavily penalised.
And penalised they need to be, because mis-selling products to older people is cowardly and unforgivable.
Mr Meade gave an example of a 94-year-old woman who was sold a bond that she could not cash in for six years. This meant the women would have to live to be 100 before she could get her money back.
Mr Meade said he had encountered a large number of cases where older people were sold the wrong products since his office was established three years ago.
The issue was so serious that he asked the Financial Regulator to carry out a review of the sales practices of finance firms when it comes to older people.
The Financial Regulator reported back to him that there was no systemic mis-selling to older customers.
But Mr Meade disagreed with this assessment and said: "There is a systemic issue here."
Mr Meade also highlighted the case of an 86-year-old man who was sold two six-year insurance bonds.
The man was sold two six-year, fixed-term insurance bonds by his bank and invested €850,000. He died seven months later.
The bonds had fallen in value by €50,000 when cashed in by his estate. Mr Meade directed that the €50,000 be repaid to his estate.
"It takes a lot to shock me, but some of these cases shocked me," the Ombudsman said.
For their part, older people should not approach banks or insurance companies without being accompanied by a trusted family member or adviser such as a solicitor.
There is a particular duty of care required when selling financial products to people of advanced years.
It is high time the cowboys in the finance industry who target the elderly were driven out of town.