Ombudsman warns financial firms on treatment of customers

FINANCIAL firms have been warned by the ombudsman for sector to treat customers fairly.

Financial services ombudsman Ger Deering’s warning came after making findings against a large number of them.

He said financial firms are often not willing to listen to customers or engage properly.

His decisions are legally binding. The ombudsman has the power to direct providers to pay compensation of up to €500,000 to a complainant and to rectify any hardship created as a result of their actions.

He can also order a provider to rectify the conduct that led to the complaint in the first place, with no limit on the value of that rectification.

One case saw a couple receive €90,000 in compensation from a mortgage provider after it adopted an “obstructive approach” when they went into arrears on their buy-to-let loan.

Mr Deering published, for the first time, 228 legally binding decisions from 234 formal investigations he launched last year, providing full details of the cases.

The names of the complainants and the financial firms in the cases have not been released.

He said cases were published so the public can see the kinds of issues that comes up, and the power his office has to remedy them.

The ombudsman said 107 of the cases he examined were not upheld.

Some of the decisions his office ruled on last year include the awarding €3,750 to a customer whose bank opened a new account without her consent or knowledge.

He also awarded compensation of €3,000 to an individual who lost his no-claims bonus after reporting a crash caused by an uninsured driver.

Other examples include awarding compensation of €7,000 and the correction of an individual’s credit rating after a lender failed to inform him that his loan had not been fully paid off, despite it ceasing to collect direct debit payments.

Mr Deering said his office dealt with a wide range of complaints relating to insurance, banking, pensions, credit facilities and investments during the year.

“It is clear from the decisions I am publishing that some providers do not always act in the best interests of their customers,” the ombudsman said.

“I have found that it is still the case that some providers are not willing to listen to or engage sufficiently with their customers to in order to resolve disputes.

“Where disputes are not resolved by agreement, I will continue to use the extensive powers available to me to investigate and adjudicate complaints in a transparent and impartial manner,” he added.

Other cases listed among the more than 200 published include the payment of compensation of €250 to a person whose travel insurance policy was automatically renewed and who was subsequently refused a refund when she tried to cancel the policy.

A customer, whose bank opened a new account for her without her knowledge or consent, also received compensation of €3,750.

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Ombudsman Report – underpayment of credit card debt

Pavel acquired a credit card in 1998 and made the necessary repayments on the card every month until October 2012, when he accidentally underpaid the amount by €19.

He called the lender in November to say that he would make the payment of €19 as well as the late fee charge of €15.

But following the missed payment, the lender said the account had fallen into arrears and it placed a restriction on its use on October 30 – but failed to tell the customer of this block. He was therefore shocked when his card was declined in a shop and was then told by the lender that the card had been withdrawn and would not be reinstated.

Pavel told the Ombudsman that the balance on his credit card when it was blocked stood at €14,166. He has paid €15,250 towards the outstanding balance, but as €9,000 of that amount being interest, the balance has only reduced by €6,250.

Pavel complained that the lender had unreasonably blocked his account as a result of a small underpayment, that the lender charged a very high interest rate after the card was blocked and that it dealt with him in an unacceptable manner.

The lender said it had sent a letter to Pavel to tell him the credit card account was in arrears, but Pavel said he never received the letter and the lender did not provide a copy of the letter in evidence submitted to the Ombudsman.

The Ombudsman said it found that the lender’s failure to fully maintain its records breached the Consumer Protection Code 2012 and it also noted that the lender did not comply with the Consumer Credit Act 1995 by clearly stating what was needed to remedy the situation.

He said that while the lender was entitled to block the customer’s credit card, it was disproportionate and unreasonable when the underpayment was just €19 and there was no evidence of previous arrears.

According to the Ombudsman, the lender also failed to comply with European Communities (Payment Services) Regulations 2009 by not unblocking the credit card once it was paid off.

But the Ombudsman also found that although the lender’s decision to block Pavel’s credit card was unreasonable, it was entitled – due to its terms and conditions – to charge the same interest on the account when it was blocked as when it was active.

He also concluded there was no intentional wrongdoing by the lender when Pavel complained that he had to wait for 25 minutes on hold to talk to the lender, and that he had found no evidence that the lender had dealt with Pavel in an unacceptable manner.

The Ombudsman said he had substantially upheld Pavel’s complaint and directed the lender to pay €10,000 in compensation. He also told the lender to remove any adverse reports on the customer’s Irish Credit Bureau record.

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How scheme will work for those at risk of losing home

A new option has been offered for those in deep arrears. Anyone considering the scheme would be wise to get independent financial advice. Here is how it works:

Q: What is this latest scheme to help those in mortgage distress?

A: The Arizun ‘Stay In Your Home’ solution is a private rental scheme targeted at people who are in deep mortgage arrears which they will never be able to pay off. They earn enough money to meet their day-to-day needs, but do not qualify for State or social housing.

Q: Why do they not qualify for the State-supported mortgage-to-rent deal?

A: To qualify for the conventional mortgage-to-rent scheme you must have an income low enough to qualify for social housing. The house has to be under a certain value, and there are restrictions on the size of house that will be accepted for the scheme. The State funds the purchase of the home, with a local authority or housing association subsidising the rental payment.

Q: How does the new scheme work?

A: People in deep mortgage arrears apply to Arizun to be included. Because there is likely to be large amounts of arrears on the mortgage, they are probably in negative equity. Arizun buys the mortgage from the bank, if the homeowners agree to hand over the title deeds.

The debt-stricken family will then have their arrears and mortgage debt written off. The family gets a long-term lease, that can be extended every six years. They pay a market rent based on the value of the house. Within the first six years, they have the option of repurchasing the home with a 40pc share in any capital appreciation to go towards a mortgage deposit.

Q: Give me an example.

A: Mary is separated from her husband, who was declared bankrupt. This means he is not contributing to the mortgage. She owes €400,000 on the mortgage, which includes arrears. The home is only worth €250,000.

Mary faces losing the home, which is now in her name.

She runs her own business and earns too much to qualify for the State-backed mortgage-to-rent scheme. She signs up to the Arizun scheme. She surrenders the title of the house to Arizun which clears the mortgage, and enters a long-term lease of six years which can be renewed indefinitely. Based on the value of her home, she pays €1,200 a month in rent. Rents will be reviewed every two years, in line with consumer price index increases. Arizun takes care of maintenance issues.

Q: Is Arizun a hedge fund?

A: No, it is backed by London-based investment house LCM. The Arizun fund is regulated by the Central Bank.

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IDA chief: Brexit can help lure investment from UK

Brexit presents an opportunity for Ireland to win foreign direct investment (FDI) that would otherwise have gone to the UK, according to IDA boss Martin Shanahan.

However, UBS chairman Axel Weber, formerly the head of Germany’s Central Bank, warned the World Economic Forum that a no-deal Brexit would have “real spillovers” for the global economy.

“An unmitigated, uncontrolled Brexit is the worst outcome we could imagine. Nobody wants this kind of tail-risk,” he said.

Speaking about the uncertainty surrounding the UK, Mr Shanahan said companies were more likely to look further afield.

“We are the market for mobile investment. So if multinationals decide that they need a footprint within the remaining 27, we are in the business of making sure that Ireland is the beneficiary of that,” Mr Shanahan said.

He added that he didn’t think this could be characterised as stealing business away from the UK. “All investment that comes into Europe, Ireland is pitching for. We make no apologies for the fact that we are pitching for what is mobile investment.”

Mr Shanahan said he’d take part in around 25 meetings and events at Davos as he seeks to win FDI.

“Part of our message is clearly that Ireland is stable, and that they can be confident investing in Ireland. To be honest with you, investors believe Ireland is a very stable environment.”

But he added that the atmosphere around Davos was more subdued this year compared to last. “I think there is more caution. There’s a raft of geopolitical uncertainty around and companies are looking at that, trying to make sense of it, figure it out and see what impacts it will have on them.”

He said there’s a possibility global FDI will decrease this year, and if that’s the case then the IDA will have to work harder to maintain the current level of investment.

It is also set to host its annual dinner at the event, with Taoiseach Leo Varadkar, Finance Minister Paschal Donohoe and representatives from a host of major companies attending.

The major story at the event yesterday was the state of China’s slowing economy.

However, the slowdown won’t be a disaster, the vice-chairman of the China Securities Regulatory Commission said.

Fang Xinghai said that the country’s macro-economic policy was “very responsible and very data-dependent”.

“On fiscal policy there is room to expand. The government sector can still leverage a lot.”

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Applicants for court-approved debt deals fall

There has been a fall in the number of people applying for court-approved debt deals.

Around 1,000 people got an approved insolvency deal to keep them in their homes last year, a rise on the previous year, according to the Insolvency Service of Ireland.

There has been a fall in the numbers being declared bankrupt.

This is despite there being 28,000 in mortgage arrears for two years or more.

Head of the Insolvency Service, Lorcan O’Connor, said that there have been fluctuations in the numbers seeking and getting official debt solutions.

He insisted the overall trend was one where more people were availing of debt deals.

He said there was a one-third increase in the numbers getting a personal insolvency arrangement (PIA). This is court-approved restructuring of mortgage payments, and may include a lender writing down some of the debt.

Figures from the Insolvency Service show there were 3,500 applicants last year for the various debt deals it offers. This is down 24pc on the 2017 figure.

But there was an 18pc rise in the number of debt arrangements that ended up being put in place. Some 959 people had a PIA put in place last year, a rise of 31pc on the previous year.

There were fewer than 400 bankruptcy cases last year, a fall of 16pc on the figure for 2017. A total of 8,000 people have got debt restructuring deals since the Insolvency Service was set up in 2013. Some 2,134 of these were PIAs, with 2,323 bankruptcies.

“While there are some fluctuations within the statistics, the overall trend continues to point towards more people seeking to avail of the solutions available through the Insolvency Service that return insolvent debtors to solvency,” Mr O’Connor said.

The Insolvency Service’s website is at

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Sterling reaches 2-month high

Sterling jumped to a 2-month high against the euro after strong employment data suggested Britain’s labour market remained robust despite an economic slowdown ahead of Brexit.

The pound slumped 7% in 2018 on Brexit concerns but it has started the year on the front foot with some investors viewing medium-term sterling valuations as decently priced.

The British currency rose half a percent today and neared $1.30 after data showed British workers’ pay grew at the fastest pace in over 10 years.

The figures encouraged traders, who believe that a disorderly no-deal Brexit can be avoided, to buy the pound.

“The market is recognising that parliament will not allow the UK to leave Europe without a deal. Today’s data will bolster the chances of a Bank of England interest rate hike as soon as May,” said Kallum Pickering, an economist at Berenberg.

But with little time left until Britain leaves the EU on March 29, there is no agreement in London on how it should exit the world’s biggest trading bloc. The chance of a “no-deal” exit with no provision to soften the economic shock persists.

“The earnings figures have been somewhat overshadowed by continued Brexit chaos. Investors are focused on how Theresa May will negotiate with the EU over the next few days,” said Tyler Griffin, a currency specialist at OFX.

Sterling firmed on Monday after British Prime Minister Theresa May sought to break a parliamentary deadlock over Brexit by proposing to seek further concessions from the European Union.

At 1630 GMT, sterling was up half percent at $1.2957. The British currency has traded within a tight range of $1.28-$1.30 for most of January.

Against the euro, the pound traded up 0.6 percent at 87.61 pence, its highest since November.

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Buyer beware: How bargains being offered by supermarkets are often bad for your health

More than a third of products on special offer in Irish supermarkets are high in fat, sugar or salt, according to new research.

Some 35pc of food and drink being sold at bargain prices was found to fall into this category.

Worryingly, the balance is even further skewed in convenience stores where it is as high as 56pc, according to the study commissioned by Safefood.

“We know that everybody loves a bargain and shoppers involved in the research told us that they made use of promotional offers to help manage the household budget,” Dr Marian O’Reilly, chief specialist in nutrition at Safefood, said.

“They also said they enjoyed the buzz of a bargain.

“But with more than a third of foods on offer being unhealthy it’s not surprising that last year Kantar data showed that the average household with children spend more on ‘treat’ foods (19pc spend) than on fruit (10pc) and vegetables (7pc).”

The research also showed that shoppers wanted to see fewer promotions on things like confectionery (69pc), biscuits (70pc) and sugary drinks (66pc).

Instead they want more frequent promotion of fruit and vegetables (92pc), fresh meats (80pc) and fish (70pc).

“These results highlight that people really don’t want to be tempted by unhealthy food offers.

“They’d much rather see healthy foods, and particularly fruit and vegetables, on special offer,” added Dr O’Reilly.

The research looked at almost 70,000 food products on special offer, and comprised interviews with retailers and shoppers, accompanied shopping trips and a consumer survey.

It found that price reductions (59pc) and multi-buys (24pc) are the most frequent type of price promotion.

In addition it showed that 85pc of promotional offers were in standard shopping aisles alongside regularly priced products, as opposed to end-of-aisle or special promotional stands.

The research was launched to coincide with Safefood’s new Transform Your Trolley campaign as part of its sponsorship of RTÉ’s ‘Operation Transformation’.

The campaign aims to encourage people to rebalance their food shopping habits, and transform their trolleys into healthier ones.

Supporting the campaign, Aoife Hearne, dietitian for ‘Operation Transformation’, said: “This research reveals just how hard it is for people to make healthier choices when shopping when these unhealthy offers are literally everywhere.

“Tips like making a list, being more aware of these promotions and having a plan for your meals and snacks are all great places to start.”

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Car loans top list as huge numbers of consumers plan to borrow from their credit union

Huge numbers of people say they plan to borrow from their credit union this year, is what is set to be a major boost for the lenders.

They mostly want the money to buy cars, with mortgages, holidays and third-level education also featuring as reasons for borrowing.

Consumers plan to borrow an average of €8,558, according to the research carried out for the Irish League of Credit Unions by i-Reach.

Most of the 1,000 people surveyed said they intend to get their loan from their credit union.

This is positive for the credit unions which are struggling to get people to take out loans from them.

Across the sector just €4.5bn is lent out to members, despite the movement having assets of €17.2bn. This means the loan to asset ratio is just 27pc, when it was traditionally 50pc.

Assets of a credit union include its investments, loan book and its buildings.

The survey indicates that more than a third of borrowers plan to take out a car loan, a traditional strength of the movement.

There has been a huge upsurge in people importing cars from the North and England due to the weakness of sterling against the euro. Many of these purchases are being funded by credit unions.

The i-Reach survey found that just over a quarter of respondents plan to take out a mortgage. However, many of those are not expected to use credit unions as they are only beginning to offer home loans on a more formalised basis.

Smaller numbers plan to borrow money this year to get married.

Three quarters of borrowers plan on getting their loan from the credit union, according to the Irish League of Credit Unions-funded research.

Banks came in second as the lender of choice at just 17pc.

Family or friends are the go-to lenders for 5pc of borrowers, while 1pc said they would borrow from a moneylender.

Borrowers will take out an average loan of €8,558. Many plan to borrow between €1,000 and €5,000, but the average is skewed upwards by the fact that one in ten plans to borrow much larger amounts for the likes of a mortgage.

Most plan on paying the money back over three to five years.

The affordability of monthly loan repayments stands out as the deciding factor in people’s choice of lender, which may point to a lack of awareness of the true cost of the loan.

Head of marketing and communications in the league Paul Bailey said it was reassuring that consumers are taking a prudent approach to borrowing this year.

“What is of concern is that there appears to be a lack of understanding among borrowers of how much the loan is actually costing them,” he said.

He said the survey shows that borrowers tend to focus on monthly repayments, rather than on the cost of credit, which is the total amount they will end up paying back to the lender.

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Fresh battle plan to lure UK tourists after Brexit

Tourism Ireland is set to unveil a new strategy to lure holidaymakers from the UK as it risks crashing out of the European Union with no deal and putting its economy in peril.

Tourism Ireland chief executive Niall Gibbons refused to be drawn on the details of the new battle plan, but said it would be reviewed by the agency’s board in the first week of February and launched at the end of next month – four weeks before the UK is set to leave the EU.

Plans are already being implemented for new border control infrastructure at Irish ports – key gateways for long-stay visitors to Ireland from the UK, for instance.

“We have to see how things unfold first of all,” Mr Gibbons told the Irish Independent.

“We have been monitoring the situation with regards to Brexit since the UK voted to leave the EU.

“We have a UK-based Brexit taskforce. We’ve carried out three waves of research by RedC, and another one going into test this week – we’ll have the results in early February. That will take account of whether current dialogue is impacting on people’s holiday intentions, or not.”

Mr Gibbons said weak sterling has been a concern for Tourism Ireland in its efforts to attract more visitors from the UK.

“Currency is something we’re very concerned about, because that immediately hits the bottom line,” Mr Gibbons said. He added the new Tourism Ireland strategy for the UK will take into account issues there at the moment.

“It’s very much consumer focused, it’s very much about maintaining and trying to grow our share,” he said.

“It’s a very competitive market in Britain. We’ve been through many ebbs and flows over the years and this is another one we’ll just have to deal with, but this situation is fluid at the moment and we just have to see how things unfold.”

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Don’t get left out in the cold: switching energy supplier could save you €260 a year

SWITCHING energy supplier is extremely quick and easy and it can all be done online in the space of a few minutes. There’s no need for any messy paperwork or to give 30 days’ notice to your current provider before cancelling. In fact you don’t even have to contact your current supplier to let them know you’re leaving.

Out of all the household bills, this is by far the most simple to switch and could save you €267, on average, a year.

This savings are despite many energy suppliers raising their prices twice in the last 12 months.

However, if you live in a large home with three or more bedrooms, or live in a poorly insulated building, the savings will be even higher.

Recent research commissioned by the energy regulator found most householders do not realise that they must be told when their electricity or gas contract comes to an end.

People who have signed up for a discount offer have to be informed by their supplier that the deal has ended and they will return to much higher standard energy tariffs, according to the Commission for the Regulation of Utilities (CRU).

How to switch
Before switching you need to make sure that you’re not in contract with your current energy supplier, otherwise you will be charged an early exit fee of €50 per fuel.

Most contracts last 12 months, so if you have been with your current supplier for over a year, you should be free to switch without penalty, according to Daragh Cassidy of price comparison and switching site

Before switching you will need four key pieces of information to hand, as follows:

You will need your meter point reference number (MPRN) for electricity, and the gas point reference number (GPRN) number for gas.

Both these numbers can be found on the top of the opening page of any recent bill.

You will also need a recent meter reading.

Required too is a good estimate of how much energy you use each year, in kilowatt hours (kWh).

This information can be obtained by looking at a recent bill.

Understandably, most people won’t have a clue about how much energy they use in a year so you can also input how much you spend in euro instead, according to Mr Cassidy.

Before switching you will need the name of the price plan that you are on with your current supplier. This will be on any recent bill. If you can’t find it, just give your supplier a quick call to enquire.

If you have a night-saver meter, it is also handy to know how much energy you use at night as this will help you get the most accurate results based on your individual energy usage.

Once you have all this information to hand, head to a site like, input the above information and you will get a comparison of all the offers available from all 10 suppliers in the market.

Then switch to the best deal for you.

Tips for getting the best deals
The first thing to consider is choosing online billing.

Most electricity suppliers have online billing and offer discounts if you choose it instead of getting your bills in the post.

Online billing is simple, your bills are archived, you can see charts of your consumption, and you can enter meter readings online.

It is easy, less hassle, and the discounts save you money.

Another way to save is to consider choosing paying by direct debit.

Mr Cassidy explains: “Most energy suppliers will offer a discount if you choose direct debit over other payment forms.

“Paying by direct debit is less hassle and means you should never miss a payment date,” he added.

Consumers have been advised not to automatically accept retention deals offered by their current supplier.

Most suppliers will offer you a retention deal at the end of your contract to encourage you not to switch and to sign up with them for another year. Although competitive, these deals are rarely the best on the market and you will usually save more by shopping around and switching to the lowest rate on the market, Mr Cassidy warned.

Some of the best deals
For dual-fuel customers, Bord Gáis is offering one of the cheapest deals on the market with a 21pc discount on its standard electricity unit rate and a 14pc discount on its standard gas price, according to

Also competitive is Energia which is offering a 29pc discount on its standard electricity unit rate and a 28pc discount on its standard gas price for new customers.

SSE is offering new customers a 25pc discount on its standard electricity unit rate and a 20pc discount on its gas price.

Through its rewards scheme it is also offering rewards such as 10pc off day passes to Dublin Zoo.

If you are just looking to switch your electricity, then Bord Gáis is offering one of the best deals with a 21pc discount on its standard unit rate at 15.48 cent per kWh including VAT.

Flogas has one of the best deals for gas-only customers at the moment, Mr Cassidy said.

It is offering a 25pc discount on its standard unit rate for new customers with its “winter warmer” offer and almost €50 off its annual standing charge for customers who sign up through

How to switch… electricity and gas
STEP 1 You will need your meter point reference number (MPRN) for electricity, and the gas point reference number (GPRN) number for gas.

STEP 2 You’ll need to provide meter readings when you switch.

STEP 3 It takes around two weeks for a switch to complete and once it does, your old supplier will send you a closing statement, which will be based on your own meter reading. You’ll need to pay that and then all your bills will come from your new supplier.

STEP 4 To find the best deals, you can use an accredited gas and electricity comparison and switching service like or

Potential savings: €267

Total time: Half an hour

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