Martin Browne (Tipperary, Sinn Fein)
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I welcome everyone to our public meeting this afternoon. We have apologies from Deputy Pat Buckley. We approved the minutes of the private and public meetings on 19 and 20 June 2024 in a virtual private meeting but we must do this publicly for procedural reasons. Are the minutes agreed? Agreed.

I remind members of the constitutional requirements that members must be physically present within the confines of the place in which parliament has chosen to sit, namely Leinster House, in order to participate in public meetings. I will not permit a member to participate where they are not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts, will have to leave the meeting.

Before we start, I wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards references made to other persons in witnesses' evidence. The evidence of witnesses physically present or who give evidence within the parliamentary precincts, is protected pursuant to both the Constitution and the Statute by absolute privilege. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way to make him, her or it identifiable, or otherwise engage in speech that may be regarded as damaging to the good name of the person or entity. Therefore, if witnesses' statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks.

It is imperative they comply with any such direction.

Before we hear from our witnesses, I propose we publish their opening statements on the committee's webpage. On behalf of the committee I extend a warm welcome to Mr. Liam Sloyan, Financial Services and Pensions Ombudsman, FSPO, Ms MaryRose McGovern, deputy ombudsman and Dr. Aoibhín de Búrca, director of corporate and communications services, FSPO. I suggest that our witnesses should make their opening statements for five to ten minutes. When they are finished making their opening statements, we will then have questions and comments from members. Each member will have ten minutes and they may speak more than once.

I call Mr. Liam Sloyan to make his opening statement.

Mr. Liam Sloyan:

I thank the Chairman for the invitation. I wish everyone a good afternoon. I am pleased to have the opportunity, together with my colleagues, to engage with the committee on the work of the office of the Financial Services and Pensions Ombudsman. The FSPO was established by legislation in 2018. When any consumer, whether an individual, a small business or an organisation, is unable to resolve a complaint or dispute with a financial service provider or a pension provider, they can refer their complaint to the ombudsman. This important statutory role provides consumers with an avenue of redress in sometimes challenging and difficult circumstances where their complaints remain unresolved. Against this background, we strive to provide the best possible service to all our customers and to effectively and efficiently manage every complaint we receive. People’s experiences are at the core of our service and the hallmark of our success is to manage complaints in line with our values and dedication to public service.

The FSPO provides an independent, fair, impartial, confidential and free service to resolve complaints through either informal mediation, leading to a potential settlement agreed between the parties, or formal investigation and adjudication, leading to a legally binding decision. In delivering this important role, the FSPO has a real impact on the lives of people who use our services. Complaints are dealt with by the FSPO informally at first, by listening to both parties and engaging with them to facilitate a resolution that is acceptable to both. Much of this informal engagement takes place by telephone. Where these early interventions do not resolve the dispute, the FSPO formally investigates the complaint and issues a decision that is legally binding on both parties, subject only to an appeal to the High Court.

The Oireachtas has given me wide-ranging powers to deal with complaints against financial service providers. I can look beyond the contractual terms and consider the fairness and reasonableness of the conduct complained of. I can direct compensation of up to €500,000 and I can also direct a provider to rectify the conduct that is the subject of the complaint, noting that there is no limit to the value of the rectification. My statutory powers include the publication of anonymised decisions issued in complaints about the conduct of financial service providers. In addition, every spring in my overview of complaints I publish a summary of all complaints received during the previous calendar year, together with trends and statistical analysis. Overview of Complaints 2023 was published on 27 March 2024. It sets out these details, together with a breakdown of the methods used to resolve complaints during 2023 and the outcomes achieved. My overview also included my report on the names of any financial service provider that had at least three complaints against it upheld, substantially upheld, or partially upheld during 2023. I will discuss the data from the 2023 overview in more detail later.

When dealing with complaints against pension providers, the legislation empowers me to direct redress. Such redress is without limit but cannot exceed any actual loss of benefit under the pension scheme concerned. With regard to pension complaints, I can publish anonymised case studies rather than the decision.

The Overview of Complaints 2023 includes an analysis of all complaints made, a review of trends and patterns in the making of complaints and a breakdown of the method by which complaints were dealt with during that year. Last year was an extremely busy one for the FSPO, with 6,182 complaints received. This represents an increase of 29% on the number of complaints received in 2022. We also closed 12% more complaints during this period than in 2022. We closed 5,184 complaints in comparison with 2022 when we closed 4,647. In doing so, the office delivered outcomes worth more than €4.7 million to consumers last year. The FSPO closed many of these complaints through dispute resolution - mediation - processes and early-stage assessments and interventions, with 85% of complaints that closed, closing within 12 months of the complaint being made.

Even after a complaint has been made to the FSPO, there continue to be opportunities for providers and consumers to resolve their complaints informally. Mediation has been central to our efforts to resolve complaints at the earliest stage and since the introduction in 2016 of mediation as the default complaint resolution process used by the FSPO, we have achieved very considerable success in facilitating the resolution of complaints by agreement between providers and their customers. Typically, more than 70% of complaints referred to mediation are successfully resolved through the mediation process.

It is important to emphasise an increase of almost 30% in the number of complaints being made to the Financial Services and Pensions Ombudsman in just one year, as happened in 2023, should be a cause for reflection among providers. It is important for them to consider what measures they can take to reduce the number of complaints being pursued by their customers. I encourage providers to reflect on the nature of the complaints brought to the office and what I consider to be missed opportunities in some situations to have resolved those complaints internally at an earlier stage.

The achievement of the FSPO team in closing an increased number of complaints in 2023 reflects the commitment and dedication of the team to deliver for our customers and to achieve our vision. It is also clear we need to further grow the capacity of the FSPO to meet the growing challenges posed by increasing complaint numbers. In this context, another important development in 2023 was the approval of our workforce plan by the Minister for Finance last December. The plan provides for an increase in our staff numbers from 90 to 128. This increase in resources combined with our work to continuously increase efficiency will significantly impact on the capacity of the office to deliver for our customers.

My annual report for 2022 details the FSPO’s progress in meeting the strategic priorities set out in our strategic plan for the period 2021-2024. The priorities outlined reflect the FSPO’s statutory role and values as well as our ambition to evolve and innovate our services and focus on customers, external stakeholders and audiences.

We are proactive in our commitment to engage and inform Government, regulators and policymakers, highlighting trends and potentially systemic issues that come to our attention, arising from complaint outcomes. To this end, during 2023 the office formally referred nine legally binding decisions in financial service complaints to the Central Bank of Ireland. This is similar in number to 2022 when we referred ten decisions to the CBI. This is an important part of our role and these referrals, in addition to the ongoing sharing of information with the regulatory authorities on areas of mutual interest, help to ensure issues, conducts and trends that are evident from complaints made to this office can be considered from a regulatory perspective. Areas of mutual interest include tracker mortgage interest rate-related decisions and business interruption-related decisions. To this end, we also shared 107 tracker mortgage-related decisions and 26 business interruption-related decisions with the CBI in 2023.

The number of tracker mortgage interest rate related-complaints received is now on a significant downward trend. Although 74 new complaints of this nature were made to the FSPO in 2023, we closed 224 tracker mortgage interest rate complaints in the same period, with a legally-binding decision issued in 107 of those complaints. One of these decisions substantially upheld the complaint and three other decisions partially upheld the complaint. The complaint was not upheld in the other 103. My Overview of Complaints 2023 highlights some of the common arguments raised in tracker mortgage interest rate complaints, which may be of interest to complainants, their representatives and providers.

It is important to note a specific area of success in efforts to limit the number of complaints arising. The departure of two major financial service providers from the Irish market, a process which commenced in 2022, posed the potential for a high volume of complaints to be made to this office, given the number of impacted customers. In July 2022, we started tagging complaints received where they were identified as arising from these market exits. This enabled us to collaboratively engage and share information with stakeholders within the banking sector, including with the providers leaving the market. This engagement successfully contributed to the reduction in the number of banking customers who ultimately required the services of the FSPO. During 2023, the office received 236 complaints identified as relating to market exit, though not all of these complaints concerned the conduct of those providers leaving the market. A total of 162 complaints relating to market exit were closed during the year, mainly through our registration and assessment or dispute resolution services. It is very positive that, to date, for the vast majority of impacted consumers, the departure of two major banks has not given rise to issues leading to a complaint being made to the office.

We are pleased to have had the opportunity to engage with the Department of Finance about its important consultation process for the development of Ireland’s national financial literacy strategy and we note the mapping report, which was recently published by the former Minister, Deputy Michael McGrath. This strategy aims to enhance financial awareness, behaviour, knowledge, attitudes and skills among citizens and aims to empower individuals to make informed financial decisions throughout their lives.

We also engaged with the Department of Finance in February on its forthcoming national payment strategy. This strategy will take account of the changing financial landscape and determine how best to adapt to it. The strategy will also take account of the EU legislative landscape, including existing proposals on instant payments and expected proposals on payment services, legal tender, access to cash and the digital euro. Additionally, a key element of the work will be to examine and analyse payment fraud to see if it can identify further domestic measures that could be taken to prevent fraud.

As noted in our 2023 overview of complaints, there has been a steady increase since 2018 in the number of complaints received by the FSPO in relation to disputed transactions. Disputed transactions include fraudulent transactions, unauthorised withdrawals, a failure to provide appropriate security on an account and non-receipt of money. It is important to note that the FSPO cannot investigate instances of fraud as that is a matter for An Garda Síochána or the courts. However, the FSPO can investigate a complaint which relates to service failings of the provider in dealing with a customer who suspects fraud on their account and any complaint about disputed transactions. In 2023, nearly a quarter of all banking complaints included the conducts grouped under the heading of disputed transactions.

In March of this year, we took part in global money week, organised by the OECD, in conjunction with the global money week national partner, the Competition and Consumer Protection Commission, CCPC. Global money week is an annual global awareness-raising campaign on the importance of ensuring that young people are, from an early age, financially aware and are gradually acquiring the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and, ultimately, achieve financial well-being and financial resilience. This office is very aware of the importance of equipping consumers with the knowledge and skills needed to make informed financial decisions.

We have continued to engage with the Central Bank of Ireland during 2023 and into this year in order to share our perspective and insights regarding the issues that contribute to consumer complaints arising. In particular, we have engaged in the review of the Central Bank of Ireland’s consumer protection code and have also contributed to the OECD review of the Central Bank of Ireland consumer protection supervisory functions.

The Financial Services and Pensions Ombudsman (Amendment) Bill 2023 is before the Oireachtas. The Bill aims to copper-fasten the protection of consumers in their access to the Financial Services and Pensions Ombudsman to make complaints about the conduct of financial service providers which have left the Irish market. The Bill also introduces legislative amendments to ensure that the FSPO continues to discharge its statutory functions in line with the Constitution, following a Supreme Court decision regarding the Workplace Relations Commission.

I thank the committee for the opportunity to engage with it today. The FSPO plays a vital role in Ireland’s consumer protection framework. We are guided by our values of fairness, integrity, independence, accessibility and effectiveness. These values are at the very heart of how we approach our daily work and interactions with our customers. We continue to maintain a strong commitment to improving our services, and focusing on engaging with, and influencing, our external environment.

I also want to thank and commend the staff of the FSPO for their continued commitment, hard work and dedication throughout 2022 and 2023. In addition, we are grateful for the ongoing support from the FSPO council, the Minister for Finance and his officials, and from across the Oireachtas for our important work. We will be very happy to answer any questions members may have.

Martin Browne (Tipperary, Sinn Fein)
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I thank Mr. Sloyan and call Senator Craughwell.

Gerard Craughwell (Independent)
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First, I apologise. Typically at this time, what is happening in the Houses is quite insane and difficult to keep up with. I thank Mr. Sloyan for being here. I am very appreciative of his office.

The first area I wish to raise is that of pension abatement. I understand there have been several court cases through the years where a pension is seen by the courts as a property right and one that cannot be interfered with. Members of the public service who retire, and particularly those who are on accelerated pensions such as members of the Defence Forces, An Garda Síochána, the fire service or the Irish Prison Service, leave service and often want to pursue something in the career they had or as close to it as they can and so they re-enter the public service. For example, an usher employed in these Houses might be a former member of the Defence Forces or something. Immediately, when they come in they are hit with a pension abatement. I understand the rationale behind pension abatement – namely, that one cannot earn more collective salary and pension than one would still serving in the organisation from which you were retired. However, my problem is that if the State want to ensure that you cannot buttress your income by retaining your full public service pension and at the same time earn a salary from the public service, should it not be the case that they interfere with the salary rather than the pension? The pension is a protected property right that is bought and paid for by the individual. Has the FSPO office a view on that?

Mr. Liam Sloyan:

This is an important opportunity to talk about the role of our office. Specifically, what we look at are individual complaints that we receive. We look at those complaints in the context of the circumstances of the individual who is applying. In a pension scheme situation, we would carefully consider the particular scheme rules that apply. Employment terms, contract terms or policy relating those matters are not a matter for us. What would be a matter for us would be if an individual had a complaint about the conduct of their pension provider that they could not resolve then they could take the complaint to us, including in respect of the types of matters that the Senator is talking about. On receipt of that complaint we would, of course, look at the specific circumstances that apply therein to the individual.

Ms MaryRose McGovern:

The Senator has raised an interesting policy question to be determined. Not long ago, we had a query of that nature from a member of the public who wanted to maintain exactly that type of complaint. We were able to point that person in the direction of the Irish Pensions Council, which we thought might be best placed to examine the issues that arise in circumstances where there are people who wish to buttress their earnings and who are already in receipt of pension benefit.

Gerard Craughwell (Independent)
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Because we have a situation where members of the Defence Forces who go into certain occupations, such as roles with the Irish Aviation Authority, for example, are not subject to pension abatement. The position is similar for Members of the Houses of the Oireachtas or employees of several semi-State agencies. Abatement was brought in to prevent very senior civil servants from taking lump sums and then coming back into the role from which they had retired. In the case of a private soldier who might have a pension of €20,000 a year, however, it seems absolutely outrageous to interfere with his or her pension. I have no difficulty if they say you cannot earn more than you would have as a private, but then they should have a separate salary scale and not touch the pension. There are several cases there. I understand where Mr. Sloyan is coming from. It is a question that it is up to individuals to come to the office if they feel they are hard done by and it will do the best it can.

Is the public sufficiently aware of the role of the FSPO and the powers it has? Is there something we in the Oireachtas should be doing to enhance the profile of the organisation?

Mr. Liam Sloyan:

We work very hard to reach out to the community and to audiences. I will ask my colleagues to talk a little further about that too. One key provision is that financial service providers must advise complainants that they can bring a complaint to us when the complaint is not resolved with the financial service provider. That is a critically important provision because it is important that people know of us when they need us. Financial service providers are obliged to bring us to the attention of the complainant at the very time they might need to call upon us.

I will ask my colleagues to say something about our outreach.

Ms MaryRose McGovern:

As the ombudsman said, our primary concern is that when people have an unresolved complaint about a financial service or pension provider that they know where to go and there is that regulatory obligation to ensure they are pointed in the right direction. Over and above that, we also want there to be a general awareness among the public that this organisation exists and have some sort of idea as to what it does. We undertook a consumer awareness survey in 2022. We were somewhat happy with the overall awareness level of 20%. In other words, if you stopped people on the street and asked them about the various ombudsmen, approximately 20% would be aware of our organisation and what it does.

Having said that, we have an outreach programme because we are conscious of certain demographics we would like to target. Last year, for example, we attended the ploughing championships and I attended the senior money event in Limerick. When you take part in an event like that, it enables you to reach out to a certain demographic and try to get an understanding of the sort of issues that are on their minds. It also, in that instance, gave me an opportunity to have a chat on Live 95 and maybe reach out to those 50,000 to 60,000 people who it is hoped have the radio on in the background.

This year, we are visiting the Tullamore Show and we are also going to visit the Jobs Expo with a view to targeting that younger demographic. We also make use of our social media policy because it is a very cost-effective way to reach out and send certain messages to that wider public.

Gerard Craughwell (Independent)
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In the case of service provided, a key component of the confidence of the public to come and use the service is to know how successful things are. Does the ombudsman carry out an after-service investigation or statistical analysis of how long it took to deal with a particular problem, the number of positive and negative outcomes and the number of cases that were spurious and should never have come to the ombudsman in the first place?

Ms MaryRose McGovern:

I might just jump in on the word "spurious" because we are open to hearing what people's complaints are, and what one person might consider to be spurious, we keep our mind's open as to whether there is really something valid behind it.

Gerard Craughwell (Independent)
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That is extremely reassuring and I thank Ms McGovern for jumping in.

Mr. Liam Sloyan:

We do very much look back on our work and I mentioned the types of processes we have whereby the majority of complaints that come into the FSPO are closed through informal processes such as mediation, agreement between the parties or through the registration and assessment process. That results in about 85% of complaints being closed within 12 months. In terms of the various outcomes, in 2023, there were total financial outcomes for complainants in the order of €4.7 million, which is similar in terms of order of magnitude to the previous year. All in all, we closed more than 5,000 complaints in the year, and we are very conscious when we are doing that of the difficult situations people can often be in when they are making these complaints. To resolve that many complaints and to bring a resolution to that many individual complainants is something our colleagues can be very proud of.

Gerard Craughwell (Independent)
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It seems mediation is a key tool used by the ombudsman. How happy are the witnesses that the mediation system works, particularly since the financial crash? Since the financial crash, there have been people within this organisation here who have set themselves up as mediators between lending institutions and distressed mortgage holders and the likes. Does Mr. Sloyan see mediation as a key role for the ombudsman and are there successful outcomes for members of the public?

Mr. Liam Sloyan:

The great thing about mediation is that the resolution they come to is one that is agreed between the two parties. Both parties have signed off that this is a resolution they are happy with and agree with. It is also a quicker way of resolving the complaints and coming to a resolution than the more formal process. There is an awful lot to be said for it. It is very successful, it closes a lot of complaints and it closes them in a context whereby both parties have agreed to the resolution, which is very positive.

Gerard Craughwell (Independent)
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Mr. Sloyan will appreciate that we get petitions in here frequently for strange things. One of the strange ones before us right now and we have discussed it at length, thanks to the Chairman and indeed our wonderful support staff, is the area of insurance, specifically insurance for thatched properties. It has become a bugbear in here. As of right now, and the Chairman will correct me if I am wrong, we have been unable to establish statistically a reason the insurance companies would be unwilling to take on thatched properties. Are they any more at risk of a fire than a slate roof house? It just seems very high handed. Insurance companies make these decisions and there is very little to advise as to why the decision arose. Is this a place where the ombudsman would feel comfortable working?

Mr. Liam Sloyan:

The financial service providers have commercial discretion in the way they conduct their business. The FSPO can only uphold a complaint based on the criteria set out in the legislation by the Oireachtas. In circumstances where a financial service provider is carrying out its commercial discretion and there are no grounds set out by the Oireachtas in the legislation for upholding a complaint, and I am not talking about thatched cottages in particular but in general terms, then it is not a matter for us. If, however, somebody can make the complaint and there are grounds that conduct was unlawful, unreasonable or improperly discriminatory or one of the other grounds that is included within the Act, then we can uphold it. Each complaint that would come to us would be considered in its own context and in the context of the grounds within the Act.

Gerard Craughwell (Independent)
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The other area of interest to me in dealing with State organisations, and I have to hold my hands up here because I am one person who is involved with it, is dealing with pensions. There is a belief among some of us in the Oireachtas that, when you are dealing with State agencies, they delay it so long in the hope that you will die before they have to answer the question. How long is a reasonable period of time to answer a question, specifically relating to pensions?

Mr. Liam Sloyan:

I hope I am answering fully when I say this but it depends on the individual circumstances of the request. There are some requests that the provider should be able to provide a response to very quickly and there are some things a provider may have to consider and may have to seek advice on. It would very much depend on the particular circumstances.

Ms MaryRose McGovern:

There is also a circular for public bodies when it comes to complaints about pension entitlements and the timeline mentioned there is about three months, but it recognises that, sometimes, to get behind those figures and figure out exactly what is going on, it does take a little bit of time. I am sure the Senator will understand that, certainly over recent years, we are in a very dynamic landscape, if that is not too optimistic a phrase, when it comes to pensions. There is an awful lot going on, including the IORPS II directive, which is pulling all of those smaller schemes into master trusts. I know single member schemes are not yet covered by that and they will not be until April 2026. The pan-European pension products, where if you are working in one member state, that pension is portable across the board, essentially, is another. There is also the auto-enrolment retirement savings scheme, so there is an awful lot going on. Even without those, where a person is raising a query about entitlements going back over a number of years, if somebody is to look at that and give it proper attention, it probably does need a little bit of time.

Gerard Craughwell (Independent)
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Sadly, too many of us who have pension queries are already in the departure lounge and we may not last long enough to get an answer to the question, which is always a problem. Regarding the mediation process, I am a former leader of a trade union so I am very familiar with mediation. Sometimes, it is much easier to do mediation without physical appearances. Sometimes the level of anxiety, aggression or resentment that is felt in bringing people together physically is not always a good way to get a solution. In all cases, does the ombudsman have people physically in the same room together or does it try to mediate through some other forum?

Mr. Liam Sloyan:

In the majority of the cases, it is done over the telephone. We are open to using different methodologies depending on the particular circumstances, but in most cases it is done by telephone, currently.

Gerard Craughwell (Independent)
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I will let the Chairman move in for a while.

Martin Browne (Tipperary, Sinn Fein)
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No, Senator Craughwell has another few minutes and can work away.

Gerard Craughwell (Independent)
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Okay, that is fine.

Martin Browne (Tipperary, Sinn Fein)
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I will give Senator Craughwell leeway this week.

Gerard Craughwell (Independent)
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I thank the Cathaoirleach. It is great that I am one of only three members present today. On complaints, where do the majority of complaints received by the office of the Financial Services and Pensions Ombudsman come from? Are they coming from banking or from insurance?

Mr. Liam Sloyan:

The majority of our complaints come from banking. Significantly more than half of our complaints come from banking, around one quarter come from insurance and lesser amounts come from investments and pensions.

Gerard Craughwell (Independent)
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I remember using the office of the Financial Services and Pensions Ombudsman many years ago with regard to one of the banks which had a charge for an unauthorised overdraft. The overdraft was 50p at the time, if I am not mistaken. The ombudsman's office was fantastic. It was the principle behind the thing. There was no notification for the customer that they would incur a charge if they had an unauthorised overdraft. Thanks to the office of Financial Services and Pensions Ombudsman, banks now have at the bottom of every statement a notification that an unauthorised overdraft will incur a charge. My personal experience is that the ombudsman's office can make serious changes and that is very much a good thing.

Mr. Liam Sloyan:

My apologies for interrupting Senator Craughwell but that is a very important point he has made. While we deal with individual complaints, often the decision that is made or the investigation we conduct in respect of an individual complaint has wide-ranging impacts. It is not just the 5,000 complaints within our office that were closed in 2023 that benefited by getting their complaint resolved. People throughout the sectors and the whole of the public have benefited from these decisions.

Ms MaryRose McGovern:

If I may follow up on that, the Central Bank of Ireland has an expectation that where a direction is made by the FSPO in any decision, that the financial services provider will apply that direction to consumers who are equivalently impacted by the issue. We do not always see the overall impact. The Senator asked a question earlier as to whether we sit down and analyse what the impact is. We do not always see what the wider impact is because we will not know in any given instance how many accounts or policies of that nature exist. We are aware of that expectation, however.

In addition to that, and touching back on what the ombudsman said in his opening statement, in 2023 there were nine decisions which were referred to the Central Bank. Those are nine decisions which were very specifically referred in order to highlight something we had a concern about. As it happened, in 2023 there were some themes to those nine formal referrals. Three of them, which is quite significant in number, concerned the manner in which financial service providers were notifying information to the central credit register, CCR, potentially having a negative impact on somebody who had found themselves in difficult circumstance, not so much because of wrongdoing by the financial services provider but more about the nature of the information that the CCR made available to the financial services provider. For example, in very complicated bankruptcy or post-bankruptcy situations, the indicators were not there to accurately describe that. A number of those referrals concerned the CCR and, as I understand it from ongoing engagement with the Central Bank, the central credit register has been looking at that with a view to making it perhaps more workable with regard to those difficult circumstances.

Another two of those referrals concerned insurance decisions where we certainly took the view that there was a potentially systemic impact arising out of the manner in which the cover interplayed with the exclusions given on one hand, perhaps taking away in how that worked, with potential confusion arising out of that. It is not just the decisions, therefore, because it is sometimes the far wider stakeholder engagement and that plays a very important part in how we contribute to the overall consumer protection framework.

Gerard Craughwell (Independent)
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On the issue of pensions, I believe that the post-2013 pension is already beginning to cause problems within the forces, the fire service, An Garda, etc. I do not know how much interaction the ombudsman's office has had in the area of pensions, but we had a pension change in the public service in 1996, if I am not mistaken, again in 2004 and then in 2013. On the 2004 change, anecdotally I am being told that problems are now beginning to arise. There are problems with the post-1996 change with respect to supplementary pension. The 2004 change is again a supplementary pension issue but the 2013 change to the pension has become a disincentive.

Has the FSPO any role in looking at the impact of the post-2013 pension on accelerated pensions, where people in the services must serve 20 or 30 years to acquire a full pension, whereas the average public servant must serve 40 years? Anecdotally, we are being told by the representative bodies, including RACO, PDFORRA, the Garda Representative Association and the Association of Garda Sergeants and Inspectors, about the impact this is having. Of course, we saw the debacle at senior levels in An Garda where people simply could not take the next promotional step because of the impact it would have on their pension, amounting to tens of thousands of euro. Has that come to the attention of the ombudsman yet or is it something that is about to come down the road?

Ms MaryRose McGovern:

I cannot say that we have seen any complaints that concern that idea of the overall value exceeding the threshold. In fact, again, that is probably back to those policy decisions as to how and what. We do not make the rules but simply operate within the landscape of the rules. When it comes to the single scheme, the Senator's question has reminded me that in 2021 we referred one decision to the Pensions Authority arising out of a failure of a pension provider to issue annual pension benefit statements. That may sound like a small thing, but for individuals who are trying to do their best to forecast where they are going to be in a number of years' time and are trying to do their sums and, potentially, invest in additional voluntary contributions, AVCs, or take other action, getting that annual benefit statement is critical. It was for that reason that we referred that decision to the Pensions Authority. On the wider policy piece, the FSPO does not have a role insofar as we offer this impartial dispute resolution process.

Gerard Craughwell (Independent)
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The FSPO does not see a role for itself in forming the policy. It is one thing for those of us who are representing the services I am talking about, or for the services' representative bodies themselves, to bring forward requests for policy change, etc. We can produce all of the empirical evidence we want but at the end of the day it is empirical evidence coming from our side rather than from an independent body. The ombudsman's office, however, is fortunate enough to be regarded as having the highest level of independence. From that point of view-----

Ms MaryRose McGovern:

We will always be willing to contribute to the conversation and share our insights but we can only do that insofar as we can harvest data on the actual complaints we have received.

Mr. Liam Sloyan:

We engage quite a bit with the Departments, the Central Bank of Ireland and the Pensions Authority in the context of, for example, the referral of the pensions complaint to which Ms McGovern referred or the complaints we refer to the Central Bank of Ireland. In addition, we publish our decisions and will prepare a report or overview of the complaints we are receiving. In this way, we engage with the wider policymakers so that they will be aware of the circumstances and the issues that are arising and being brought to our attention and how they are being resolved within our office. While we are dealing with individual complaints, we are very much engaging with wider policymakers on the experiences people are having and the resolutions that are being arrived at.

Gerard Craughwell (Independent)
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Right now we have a piece of legislation passing through the House on the Court Service, immigration and social welfare. There are about ten different things stuck in it. Right at the end of the legislation, there is a piece on superannuation. One would want to have ten pieces of primary legislation available in order to cross-reference what it is we are changing. That point has been made in the House.

In the case of something like pensions and superannuation, a change can pass through the Houses of the Oireachtas without the latent impact being fully understood. It is only when the full policy kicks in that the impact is understood. The ombudsman's office will probably, over time, encounter issues relating to the impact of the financial emergency measures in the public interest, FEMPI, legislation, in particular. I certainly have encountered such issues. I have fought one or two battles on them and won, without having to go to the ombudsman.

It was done in a hurry, and we all understand why. The State was in dire straits, but it strikes me that the FSPO is going to have queries coming down the road. Have any of these queries started to hit the organisation yet, particularly in the area of pensions and superannuation?

Mr. Liam Sloyan:

The Senator has touched on another important point that I would like to draw attention to, which is that complaints should not necessarily need to come to us. As he said, he was able to resolve them directly with the provider on occasions himself, without the need for our services. This is better from our perspective, that complaints be resolved without the requirement for our services, when they are either pension providers or financial service providers. They can look to the various information that we put out there regarding experience, resolutions and how they can resolve the complaint directly with the complainant themselves without requiring our services. There are some examples in our overview of situations whereby people brought complaints to our office and sometimes those complaints were closed almost immediately. Our office got in contact. Other times, they proceeded all the way through dispute resolution services and onto a formal investigation before they were resolved. Again, they were resolved without the need for a decision and were resolved ultimately between the complainant and the provider themselves.

When we are asked if we are receiving complaints on issues that came up a few years ago, ideally where something has happened, there is an opportunity for the provider to resolve the complaint before coming to us. It need not necessarily follow that even if issues do arise, they result in complaints coming to our office, and should not be in all cases.

Ms MaryRose McGovern:

In his opening statement he referred to more than 6,000 complaints received by the FSPO last year, which was an increase of 29%. We see no need for that number of complaints to be coming as far as needing the services of our organisation. I looked at the data before I came here today, and we are on a trajectory for the same number for 2024. It is for that reason that the ombudsman has referred to that opportunity for providers to consider if they are really doing their best to resolve the complaints that their own customers are making about their service, and if they have to let them go that far.

Gerard Craughwell (Independent)
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For what it is worth, my experience dealing with the FSPO and other ombudsmen has generally been that it takes one letter from the ombudsman for people to realise they have to sit down and talk to each other to resolve problems. For that, I am extremely grateful. I am mindful of one pensioner, back in the 1970s, who retired on a pension of £15 a month. A year later, his colleague retired with a lump sum of approximately £100 a week, and this man felt he was hard done by. After 15 years of writing to the trustees of the pension scheme, they apologised and said they had underpaid him by 25 pence a month. The scheme repaid him approximately £17. If the ombudsman had been around back then, we might have had a different outcome. I thank the organisation for its service to the country and for the way in which it deals with people who are in distress.

Martin Browne (Tipperary, Sinn Fein)
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I want to come back to a few things Senator Craughwell has largely covered. The office referred nine complaints to the Central Bank during 2023. What happens when they are sent to the Central Bank? Does the Central Bank feed back to the FSPO and does ombudsman have any input after that?

Ms MaryRose McGovern:

It can be seen in our periodic engagements with the Central Bank that our referrals feed into their work plan. It is then a matter for the regulator to prioritise within those referrals what it considers to be most important.

Martin Browne (Tipperary, Sinn Fein)
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The Central Bank will not feed back to the FSPO on the nine referrals that it gave.

Ms MaryRose McGovern:

I mentioned, for example, that there was no feedback on the Central Credit Register. I was happy to receive a communication from the Central Bank that work was being done to tackle the issue that I had raised in those referrals.

Martin Browne (Tipperary, Sinn Fein)
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In his opening statement, Mr. Sloyan said that the office was established by legislation in 2018 for any consumer, individual, small business or organisation, where they were unable to resolve a complaint or dispute with the financial service provider. Would the witnesses say the consumers or financial services and pension providers are aware of the important role that it plays? Is there something that could make it more user-friendly, given the situation?

Mr. Liam Sloyan:

Awareness of the office is very important. What is critically important is that people are aware of us when they need us. There is a requirement on financial service providers to let complainants know that they can come to us at that point. Our surveys to date have shown general awareness of approximately 20% of our services. We would like to increase that number further and we do a lot of work in that regard, including digital marketing, social media, leveraging things like our overview reports to get more coverage in the media, as well as our publications and decisions. All of these help to increase awareness of us. The attendance at events for FSPO staff, including events like the ploughing championship are important too. We are doing a lot of good stuff in increasing awareness of the FSPO, but the critical thing, as I said, is that people are aware of us when they need us.

Martin Browne (Tipperary, Sinn Fein)
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When complaints are dealt with by the FSPO, they are dealt with informally at first. The opening statement mentioned that this is done through telephone calls and that. DO FSPO staff have physical meetings with complainants? Are the decisions made immediately following the information coming back, or are they conveyed to them at a later date?

Ms MaryRose McGovern:

Anyone can walk in off the street during office hours and speak to somebody on our reception desk, if that is the way a person wants to access our services. Accessibility is one of our core values and we are very mindful of providing the service in a way that suits people best. It is one of the themes in our customer charter. Approximately 80 to 85% of complainants want to use the digital pathway to use our services every year and will complete the complaint form online and communicate with us by email. For those who want to write to us using the postal services or who want to drop in to see us to make a complaint and to get some guidance on what they need to do, we are open to making that service available to them. We are happy to talk to people in person. We are conscious of ensuring that people are comfortable with the way that they access our services. In fact, idir an Ghaeilge agus an Béarla, is í an tseirbhís céanna atá ar fáil, whatever language they speak, we will make the same service available to them. Irrespective of what the nature of the issue is, what age a person is, where that person is from and what language that person speaks, we make the same service available. In our overview of complaints, we have included a map of where our complaints come from. The committee might be interested in pages 19 and 20 of that report where it shows that 80% of our complaints come from the island of Ireland while 20% of our complaints come from other parts of the world. That includes about 6% that are beyond Europe. If the financial services provider is regulated in this jurisdiction or if it comes within the definition, anybody can make a complaint about the conduct of that provider. Accessibility is key to the service.

Martin Browne (Tipperary, Sinn Fein)
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According to the overview of complaints, 247 complaints were withdrawn at various points throughout the process. The reasons for withdrawing vary from time to time. Are all withdrawals be in writing to the FSPO or how do people convey that they have withdrawn their complaints?

Mr. Liam Sloyan:

The overview also includes some case studies in respect of some of those complaints that were withdrawn. Case study three on page 47, relates to Sergey, who felt there was misreporting to the Central Credit Register in respect of his accounts, and he was not getting anywhere with the financial services provider. He then contacted the FSPO.

Shortly afterwards, the complaint was addressed and the matter was resolved.

On the FEMPI cases, the complaint is just that contact from the complainant may cease. We tried to contact the complainant over some time there but if there is no contact, the complaint may eventually need to be closed in those instances.

Ms MaryRose McGovern:

It is also important to acknowledge that we undertake closure surveys, whereby if a complaint is closed at an early stage and we cannot understand why, we give people the opportunity to give feedback to us about why they withdrew their complaint or were not in any further contact in order for us, if possible, to categorise it as a settlement. Alternatively, if somebody just found the service too tricky or needed further assistance from our access officer, we want to know about it in order that we can tackle that.

Martin Browne (Tipperary, Sinn Fein)
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Yes. There have been reports in the media which have been critical about the length of time it takes the office to consider and resolve complaints from consumers. I assume the Financial Services and Pensions Ombudsman will challenge that. Will the witnesses respond to those reports and indicate the average length of time from the start to the finish of a process, if there is one?

Mr. Liam Sloyan:

The average length of time for a complaint to be closed within the FSPO is around eight and a half months, with 85% of complaints being closed within 12 months. The majority of the complaints closed are closed through the mediation and other early resolution services. When a legally binding decision is required, the process is more complex and those complaints take longer to resolve.

Martin Browne (Tipperary, Sinn Fein)
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How many people work in the Office of the Financial Services and Pensions Ombudsman? Mr. Sloyan said it increased the number of staff. What is the trend as regards staff numbers this year? Will the office have enough staff to continue to achieve the success rate it has achieved in the past few years? Does it need more staff because of the increased number of complaints coming in?

Mr. Liam Sloyan:

Yes, we need more staff because of the increased number of complaints. We are very happy that this has been sanctioned and we are now growing to that level. We were sanctioned for 90 staff and now we are sanctioned to have 128. We are currently very busy recruiting those staff members.

Ms MaryRose McGovern:

In terms of recruitment, at the start of the year we had 86 staff and we now have 99. Based on onboarding and contract dates, we are projecting that we will have 115 staff by the end of August and everyone in by the end of the year. These are an additional 38 members of staff.

Mr. Liam Sloyan:

This will be significant in terms of our ability to meet the growing challenges we are facing. In terms of the ongoing trend, what we would ultimately like to see, as I noted in my overview and statement, is the number of complaints coming to us going down. A 30% increase in the number of complaints received in a year is something the providers should reflect properly. Providers should start looking at what can be done in this regard. I know they are looking at it but they should continue to do so.

Martin Browne (Tipperary, Sinn Fein)
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On the issue of complaints with legally binding decisions, is it correct that of the 107 tracker mortgage complaints that were closed with legally binding decisions, 103 were not upheld by those decisions? Is there anything to be learned from the fact that such a low proportion of these complaints were upheld? One of the purposes of the Financial Services and Pensions Ombudsman (Amendment) Bill 2023 was to address a loophole that had left thousands of mortgage holders without access to the ombudsman because the provider had left the Irish market? That Bill is on Committee Stage. What can the committee or the ombudsman do or say in the meantime?

Ms MaryRose McGovern:

The primary driver behind the Financial Services and Pensions Ombudsman (Amendment) Bill 2023 is the Supreme Court decision in the Zalewski v. Adjudication Officer and WRC, Ireland and the Attorney General case, which dates back to April 2021. The issue that arose was that the governing legislation of the ombudsman prescribes that complaints are investigated "otherwise than in public". This wording is pretty much identical to the wording in the governing legislation of the Workplace Complaints Commission and the Supreme Court took the view that this blanket prohibition on having hearings in public was contrary to the Constitution. The primary rationale behind the Financial Services and Pensions Ombudsman (Amendment) Bill 2023 is to ensure that it will be open to the ombudsman to have an oral hearing conducted in public, when the circumstances are appropriate.

In terms of the other aspect, where financial service providers are no longer operating within the jurisdiction, that has never presented a difficulty for complainants to make a complaint to the FSPO because of the manner in which the existing legislative provisions have been interpreted. However, we recognise there is a potential ambiguity in one of the provisions and in order to tie that away, there is another amendment in the published Bill that will copper-fasten what has been our interpretation of those legislative provisions to date.

Martin Browne (Tipperary, Sinn Fein)
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Individuals whose loans are held by vulture funds sought to complain about the conduct of those funds through the FSPO. However, they were told by the office the complaints cannot be investigated because at the time they were made the vulture funds were not regulated. I ask for a comment on that.

Ms MaryRose McGovern:

In order to understand the context of that, I refer back to 2015, when a number of loans that were categorised as "non-performing" in accordance with EU requirements were sold by the existing banks to special purpose vehicles. At the time, in order to protect the consumers of those loans, the Government introduced the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 to ensure people were protected in the day-to-day communications they receive. However, a small gap was left but that was resolved at the beginning of 2019. Since January 2019, anybody who has a loan, whatever the nature of the loan owner, can make a complaint. For the last six years or so, anybody can make a complaint. For conduct that occurred before 2019, there is probably a small number of people who are impacted by the fact that the legislation or gap was not closed until 2019. The Department of Finance is looking at that to see whether further legislative amendment can fix it.

Gerard Craughwell (Independent)
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I wonder about those we used to call "loan sharks", the guys who operate on the edge of the financial world offering small loans. We hear anecdotal stories about them waiting outside the post office to take the children's allowance off a lady. How prevalent is that practice now? Is it something the FSPO has statistics on?

Martin Browne (Tipperary, Sinn Fein)
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They are still there. They just call themselves something else.

Mr. Liam Sloyan:

If they are a regulated financial services provider, they come within our remit. If an entity is regulated as a money lender and a customer has a complaint in respect of its conduct, it can be brought to the FSPO.

Gerard Craughwell (Independent)
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Has the office received any such complaints?

Ms MaryRose McGovern:

There has been a small number over the years. I could not say from the data we have that there was any particular level of dissatisfaction expressed at that time. I am not sure moneylenders still operate. I believe they may have ceased their operations but it is certainly the case that, for a certain demographic, they were providing a service that people appreciated without having the need to go through a more formal process to get access to funds in the short term.

Mr. Liam Sloyan:

The key point is that they are regulated on a register with the Central Bank of Ireland. A complaint can be brought to our office regarding any provider regulated by and registered with the Central Bank of Ireland.

Gerard Craughwell (Independent)
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I am delighted to hear the FSPO is increasing employment at the office. Are all those being hired people from financial services, chartered accountants, etc?

Ms MaryRose McGovern:

It is a real mix of people, everything from HR professionals and corporate service professionals to people who work in mediation. There is a real range of people.

Martin Browne (Tipperary, Sinn Fein)
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As there are no further members who wish to speak, I thank Mr. Sloyan, Ms McGovern and Dr. de Búrca and invite them to make their closing statements.

Mr. Liam Sloyan:

I thank the committee and acknowledge our team for the tremendous work they do for all of our customers and to help people at difficult times in their lives.

Gerard Craughwell (Independent)
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I ask that when we have the ombudsman before the committee in the future, we try to do it mid-term rather than coming up to the end of the year. There is so much going on in the Houses right now, with legislation being rushed through, last-minute meetings and all that sort of stuff as we come to the recess. It is a bit unfair on the witnesses to have such a small turnout. Ordinarily, we would have a lot more people.

Ms MaryRose McGovern:

We are delighted to be here and to have the opportunity to talk about the work of the office of the Financial Services and Pensions Ombudsman, irrespective of the number of people who are here physically because we know there will be people who listen back on the Oireachtas channel.

Martin Browne (Tipperary, Sinn Fein)
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Senator Craughwell covered most of it, so nobody else was needed.

Gerard Craughwell (Independent)
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That is the people who cannot sleep at night. They constantly send me emails and tell me I put them to sleep.

Martin Browne (Tipperary, Sinn Fein)
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I thank the witnesses and members again. The discussion has been very beneficial and, as Ms McGovern said, people will look at it on Oireachtas TV. We will now suspend the meeting for five minutes to allow the witnesses to leave the room.