The Financial Services and Pensions Ombudsman Act 2017 which amalgamates the Financial Services Ombudsman and the Pensions Authority into an Office of the Financial Services and Pensions Ombudsman (FSPO) is due to come into force on 1 January 2018. The FSPO will be established on that date and the changes to the complaints procedure set out in that Act will also come into force.
Summary of Act
Extension of Time Limit
The Act provides that the time limit for a consumer to make a complaint to the FSPO is 6 years (the current time limit) however, if a consumer complaint relates to a 'long term financial service' the six year rule shall not apply. Long term financial service is defined as including financial services with a duration of 5 years and one month or more and life assurance policies.
The time limits for a consumer to make a complaint about a 'long term financial service' are:-
a) 6 years from the date of the conduct concerned; or
b) 3 years from the earlier of the date on which the person making the complaint became aware, or ought reasonably to have become aware, of the conduct concerned; or
c) such longer period as the FSO may allow where it appears to him or her that there are reasonable grounds for requiring a longer period and that it would be just and equitable, in all the circumstances, to so extend the period.
The 'long-term financial service' must have not expired or otherwise been terminated more than 6 years before the date of the complaint, and the conduct complained of must have occurred during or after 2002.
The Act provides that the FSPO can investigate complaints made before the coming into force of the Act but which had not been assessed due to them being time barred. This means that complaints that were refused as being outside the then applicable time limits can be resubmitted to the FSPO as they could now possibly qualify under the new extended time limits. The retrospective nature of the legislation is clearly set out in the Act.
Powers of Ombudsman
Under the Act the FSPO, in investigating a complaint, has the power to obtain information in such manner and make such inquiries as he or she thinks fit.
Under current legislation the FSPO may require the regulated entity or any associated entity to provide information or documents relevant to the investigation and to require officers, members, agents or employees of the regulated entity to give evidence. This power has been extended in this Act so that the FSPO may now require 'any person' to provide documents, information or give evidence in relation to a complaint.
Information or evidence by an individual in such circumstances shall not be admissible in criminal proceedings against that person and legal privilege in documents is preserved.
Jurisdiction of the Ombudsman
The Act continues the requirement that the FSPO will not deal with a complaint where legal proceedings are in being. However, the FSPO is now empowered to accept a complaint against a regulated entity who has instituted legal proceedings, where the FSPO believes that those proceedings were commenced to prevent the making of the complaint or to frustrate or delay its investigation. The Act also provides that the decision of the FSPO as to jurisdiction will be final.
Declining to Investigate
In addition to the current reasons for declining to investigate the Act provides that the FSPO may also decline to investigate where the subject matter of the complaint is of such a degree of complexity that the courts are a more appropriate forum for the complaint.
Internal Dispute Resolution Procedures
The Act continues the requirement that the complainant must engage with the regulated entity and provide a reasonable opportunity for it to deal with the complaint through internal dispute resolution procedures. However, the FSPO may consider a complaint before the internal dispute resolution process is completed where the regulated entity has failed to complete the review within the time limit or the complaint is of such importance so as to warrant waiving the internal dispute resolution procedure.
The time limit set out in the Act is suspended for the period during which a complaint is being considered under the internal dispute resolution procedure of a regulated entity.
The Act also provides that the Minister may require regulated entities to establish procedures for dealing with complaints.
With regard to compensation in respect of complaints relating to financial service providers the Act puts in place a cap of €26,000 per annum where the subject of the complaint is an annuity and €250,000 in respect of all other complaints. In relation to pension providers there is no cap on compensation, however the Act provides that any financial redress should be an amount the FSPO deems just and equitable, but shall not exceed any actual loss of benefit under the scheme in question.
The appeal period has been extended to 35 days.
The Act extends the powers of the High Court on appeal allowing it to make an order amending a decision of the FSPO or to make such other order as it considers just in all the circumstances.