# Ombudsman awards €397k compensation in total during Jan to June



## Brendan Burgess (22 Aug 2013)

> 5.1 Summary
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This is an incredibly low figure and would certainly call into question the purpose of the Ombudsman's office.  I have argued in favour of using the Ombudsman instead of going to court. I am not so sure now. 

Was there really so little mis-selling of investment products that people lost only €146,148?  Some years ago, I advised on a claim which received almost that amount alone. 

*Previous years*



 |total| first half| second half
2011|€2.3m |€1.3m|€1m
2012|€2.5m|€1.7m|€0.8
2013||€397kSource: [broken link removed]

*How much was the average award? 

*

|2012|2011
Compensation| €2.5m|€2.3m
Awards upheld|800|730
Average award|€3,125|€3,150


*How much does the Ombudsman's service cost? 
*The Ombudsman's Office   €4.4 m (in 2010) 
The financial institution's cost of handling complaints: 
The costs of the complainants'
Legal fees

I presume it is far more than the cost of the service.


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## Brendan Burgess (22 Aug 2013)

*Ombudsman upholds 11% of complaints *



 | 2012|2011
Upheld|10%|12%
Partially upheld|17%|15%
Not upheld|73%|73%
Total|100%|100%
I have seen big claims, partially upheld, being awarded €1,000.  So a massive loss for the complainant. 

With a 10% success rate, is there much point in complaining to the Ombudsman?


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## Gerry Canning (22 Aug 2013)

From Gerry Canning ppi.

We have cases going to court v Ge Money ,V AIB V Mbna etc..

We HAVE little faith in Ombudsman.We prefer a REAL JUDGE.

 As an example of our Ombudsman,  I had one BOI case were I could PROVE in writing BOI had not conformed on 2 points with Consumer Legislation were it says Bank MUST do. On 4 other points that were verbal Ombudsman still found 4 nil in favour of the Bank !!
On Radio it is reported he finds for consumer on 13% of cases. Hmn! in UK on PPI it is 80% . Same product ,sold in same way , can someone explain please?
The Ombudsmans results simply do not add up. 

I and all would like to believe our Ombudsman is (fair). I would also like to believe our other Ombudsmans friends in Central Bank work off a Consumer Mandate. 
Sorry if this sounds like a bit of  Rant but it comes from coming to the sad realisation that I cannot trust our mandated regulators.


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## Raging Bull (22 Aug 2013)

Gerry I echo your sentiments. Its supposed to be impartial but the stats are so skewed in favour of financial providers it cant be argued that it is.

Any cases I have seen if there is doubt or an issue on verbals they decide in favour of Financial provider irrespective of the provider being required by regulation to maintain records.


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## Brendan Burgess (22 Aug 2013)

Raging Bull said:


> Any cases I have seen if there is doubt or an issue on verbals they decide in favour of Financial provider irrespective of the provider being required by regulation to maintain records.



I am not sure that is a fair reflection. 


If the consumer claims something, and the financial institution denies it, he would be guided by what is in the terms and conditions, which usually favours the financial services provider.


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## Raging Bull (22 Aug 2013)

Brendan I can only give an opinion based on what I have seen and experienced.

I think that the High Court Case Lyons & Anor V FSO sets out what the Ombudsman should be looking at particularly para 33 & 34


32. It must be recalled, however, that all banking - and, perhaps, especially retail banking - is built on trust. Oral assurances from bank officials regarding the likely future course of the banking relationship are, of course, not unknown. This may well be particularly true of a period in our recent economic history - perhaps in especially the period from 2004 to 2007 - for which Greenspan’s famous description of such societal conduct - “irrational exuberance” - seems especially apt: see A. Greenspan, _The Age of Turbulence - Adventures in a New World_ (Allen Lane, 2007) at 176-178. 33. Naturally, the recipient of such an assurance will not normally regard it as legally binding. The common law, with its preference for writing and its general distaste for parol evidence in the sphere of contract law, will but rarely lend its assistance to such claims, especially where (as here) the context is that of a commercial loan for business purposes. This is illustrated by the classic decision of the English High Court in _L’Estrange v. Graucob Ltd_. [1934] 2 K.B. 394, an authority relied on by Mr. McDermott for this purpose. Here, aided by the spirited arguments of one A.T. Denning, counsel for the defendants, two distinguished judges, Maugham L.J. and Scrutton L.J (whose respective fidelity to the orthodoxies of the common law could never be questioned) held that a plaintiff could be bound by the terms of a standard form contract, the terms of which she had never actually read. While the full rigours of this orthodox common law position may be mitigated by doctrines such as _non est factum, estoppel_, part performance, undue influence and the like, the traditional preference on the part of the common law for the written word in matters of commercial dealing remains undimmed. These considerations notwithstanding, the recipient of such an oral assurance is nonetheless likely to regard such it as sufficiently definite to arrange their affairs accordingly. It is precisely in this realm that, as I put it in _*Koczan*,_ disputes of this nature may be resolved by the Ombudsman by reference to “wider conceptions of _*ex aequo et bono*_ which go beyond the traditional limitations of the law of contract”.

http://www.courts.ie/judgments.nsf/...5798200352f65?OpenDocument&Highlight=0,Koczan

Is the Ombudsman office not supposed to be about ex aequo et bono ? In layman terms according to equity,conscience and whats good? That is exactly as to why they are created to be a quasi legalistic institution rther than a purely legalistic institution. So why in a verbal argument do they always take the bank side?


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## Monksfield (22 Aug 2013)

I advised on an investment case earlier this year in which I simply could not believe the FSO ruled against the complainant. In my opinion, the case was a 'slam dunk'.

People who operate in this area have been saying that under Bill Prasifka it has been much harder to have complaints upheld. The figure Brendan cites for investment compensation is risible in light of the number and size of strong cases of which I am aware - obviously a small fraction of what is out there.


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## mercman (22 Aug 2013)

Brendan Burgess said:


> I have argued in favour of using the Ombudsman instead of going to court. I am not so sure now.



Brendan, this is very good to note. But surely the mass must be allowed their spoke. The purpose of the Ombudsman's office in these cases is to act for the people. This just is'nt happening and submissions should be made to local TDs, who on inspection of findings should bring the unreliability to the Minister of Justice.

He's the boss of this office and should be forced with a little bit of pressure to have a quiet word to those concerned.


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## Brendan Burgess (22 Aug 2013)

mercman said:


> The purpose of the Ombudsman's office in these cases is to act for the people. .



Hi Mercman

That is not the purpose of the Ombudsman at all.  

He is supposed to be an independent person showing favour to neither the people nor the financial institutions. 


Brendan


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## Raging Bull (22 Aug 2013)

That's true about being independent however the stats don't show that if only 13% of cases are being upheld in favour of consumer. Sure every case is supposed to be considered on individual merits but I think the whole point what everyone is saying is that strong cases are being dismissed whilst ignoring blatant breaches of consumer protection legislation

If other people are of the same view It might be a good idea to submit a petition to Oireacthas so they can at least investigate it

[broken link removed]


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## Gerry Canning (23 Aug 2013)

Raging Bull; Good point, there is a lot of work going on already but without political weight it is a long war.

We are rightly highlighting Ombudsman ....but also include our Central Bank.

The Ombudsman,s is supposed to be Independent and fair, I contend he is neither.

The Central Banks MANDATE is to PROTECT the Consumer, they don,t.
eg on my subject ppi, they advised people to leave Banks to sort matters under an (independent!)Review. 1. Review is done by and paid for by the same Banks !!
2. Review does not include Mbna ,a large ppi provider. 

I cannot figure this out and conclude there is an axis of cosiness between our Banks and our Regulators supported by the Political establishment.

Raging Bull, I like your proposal , can I suggest people get onto their local Td as well.


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## mercman (23 Aug 2013)

Gerry Canning said:


> I cannot figure this out and conclude there is an axis of cosiness between our Banks and our Regulators supported by the Political establishment.
> 
> Raging Bull, I like your proposal , can I suggest people get onto their local Td as well.



Why do you think Matthew Elderfield jumped ship. They wouldn't allow him get a word in regardless of what he saw or thought. The entire Financial System in Ireland should be ceased operations with immediate effect. For once we need to follow the Brits who have started cleaning their act up.

Concerning the proposal of concerning their local TD, this was my idea and I do sincerely hope that ALL persons that have been effected do this, to evidence the fact that we as persons with rights that have been wronged, won't be treated in such a disgusting manner.


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## Brendan Burgess (23 Aug 2013)

mercman said:


> Why do you think Matthew Elderfield jumped ship. They wouldn't allow him get a word in regardless of what he saw or thought. .



Did he tell you that directly? 

He was here for over 3 years and 6 months. I would imagine that was his intention all along. A good job came up for him in the UK, paying an awful lot more than the Central Bank. 

He did a great job while he was here, not perfect, but great. Now it's time for him to move on.


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## Jim2007 (23 Aug 2013)

mercman said:


> For once we need to follow the Brits who have started cleaning their act up.



The Brits are every bit as bad and their clean up will only be skin deep like every previous one!

Rather than replicating another failed system, look to Euroland and go with one that actually works....  For the past 25 years I've worked mainly with Austrian, German and Swiss investors and I've never heard of anyone complaining about miss-selling - TBH I'm not even sure the concept exists.


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## Gerry Canning (23 Aug 2013)

Mercman, your idea of contacting local Tds is very good.
Jim2007; We slavishly followed Uk on PPI sales. I would love to see us slavishly follow them on genuine PPI miss-selling claims!
................................................................................
We need people not leprechauns in Ombudsman office and Central Bank.
Sorry if I offend leprechauns!!


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## Jim2007 (23 Aug 2013)

Gerry Canning said:


> Mercman, your idea of contacting local Tds is very good.
> Jim2007; We slavishly followed Uk on PPI sales. I would love to see us slavishly follow them on genuine PPI miss-selling claims!
> ................................................................................
> We need people not leprechauns in Ombudsman office and Central Bank.
> Sorry if I offend leprechauns!!



Well I don't believe for a minute that tighter regulations will fix the problem!  

The primary reason that people lost money was because they choose to allocate a large portion of their investments to property, the secondary reason was that having decided to go with property, they were invested in the wrong products.  But here is the thing, had they followed a typical middle-European style asset allocation, they'd have had only about 5% to max. 10% of their capital allocated to property, so even if it was wiped out, they would only have lost a fraction of their money.  

There are three lessons people need to take a way from this experience:
- You do not borrow money to invest
- You do not concentrate your investments in a high risk asset such as property
- You do not concentrate your investments in a small economy.
And I have a strong feeling that these lessons are not being learned either by the investors or their advisors!

Now most of my work for the past 25 years has been in the are of performance attribution and I have no doubt that portfolios that have a large allocation to property, particularly if it is concentrated in a small open economy are almost certainly going to get hammered in a recession.  And so long as investors continue to construct such portfolios in the believe that they are low risk, they are very likely to get hammered regardless of how well regulated it is.


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## peteb (24 Aug 2013)

I feel I need to chime in here.  I would have been initially a little sceptical of the worth of the FSO.  However I used the service to get my tracker back from Ulster Bank.  

Having proceed against them myself initially and after a number of written exchanges with Ulster Bank consistently frustrating the matter, I got my final response letter and off I went to the Ombudsman.  UB tried the same line of dispute with them.  However they asked the questions I would have asked and never got responses, looked at the matter and awarded me back my tracker.

At any point of contact they were helpful and courteous so I can't really complain.


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## Brendan Burgess (24 Aug 2013)

Hi pete

That's great news and I gather that UB sometimes learns from these decisions.  So other customers with the same complaint get sorted without going to the Ombudsman. 

So while the Ombudsman upholds very few complaints, maybe there would be far more if he wasn't there? 

Overall, there needs to be some independent review of the Office to look at the cases. 

Brendan


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## Monksfield (25 Aug 2013)

Absolutely agree with Brendan - no viable appeal or review. Even if you had the money to go to the High Court it has been made clear in previous appeals that there has to have been a major omission or error in the process for a decision to be overturned. Reaching an incorrect decision (yes, I know it is not always clear-cut) based on a review of all the facts will not be overturned.


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## mercman (25 Aug 2013)

Jim2007 said:


> There are three lessons people need to take a way from this experience:
> - You do not borrow money to invest
> - You do not concentrate your investments in a high risk asset such as property
> - You do not concentrate your investments in a small economy.
> And I have a strong feeling that these lessons are not being learned either by the investors or their advisors!



Jim, You have made so very valid points in this post. But notice must be taken where Investors didn't always make the mistakes. Maybe you should place a category in their where the alleged advisers steered the Investor down a collision course. In many cases the terms of a contract were breached by the so-called advisers and the companies they were working for alluded to assisting them.


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## mercman (25 Aug 2013)

Monksfield said:


> Reaching an incorrect decision (yes, I know it is not always clear-cut) based on a review of all the facts will not be overturned.



It's not really a great justice system we have in this country, is it ??


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## Gerry Canning (9 Sep 2013)

See posts on Payment Protection.
Our Ombudsman finds for Consumer 12% of the time.
The Uk Ombudsman finds for Consumr 80% of the time.
Can I quote you Brendan, in other threads Brendan now has doubts over Ombudsmans conclusions.

There is NO WAY Uk sales/complaints are that different to here.

I suggest our Ombudsman is SIMPLY not up to the job.
Think about it , on ANY argument someone is correct on average 33% !!


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