The Financial Services Ombudsman, William Prasifka, has published his office’s latest bi-annual review, covering the period from July to December 2012. The review reveals record numbers of complaints being made to the Ombudsman as the effects of the financial crisis continue to be felt. In particular, there were an increased number of complaints relating to payment protection insurance in 2012.
Insurance-related complaints have consistently accounted for approximately half of all complaints received by the Ombudsman in recent years. 4,064 insurance-related complaints were received in 2012, representing an 18% increase from 2011. Of these, payment protection insurance complaints were the most common, accounting for 32% of all insurance-related complaints, followed by motor insurance complaints at 12% and life insurance at 11%. The mis-selling of products was the most common source of insurance-related complaints, accounting for 33% of all such complaints in 2012, followed by the repudiation of claims which accounted for 27% of insurance-related complaints.
One of the most striking figures of the review was the massive increase in payment protection insurance complaints. 1,280 complaints were received in relation to payment protection insurance products in 2012, representing a 212% increase from 2011. According to the Ombudsman, these complaints mainly related to the suitability of payment protection insurance for the consumer, and the consumer’s lack of knowledge that they agreed to and paid for the product in the first instance.
The Ombudsman has expressed concern over the large numbers of complaints being received, but has indicated that the numbers are likely to continue to rise in the near future. He emphasised the need for financial service providers to do more to engage with consumers before complaints arise, noting that many consumers cannot move forward with their lives unless and until these complaints are dealt with fairly and effectively.
2,995 findings were issued by the Ombudsman in 2012, of which 1,524 related to insurance complaints. Of the insurance-related findings, approximately 10% upheld the complaint in question, 15% partially upheld the complaint and 74% did not uphold the complaint.
In the final six months of 2012, a total of €994,505 was awarded in compensation, €189,252 of which was awarded in respect of insurance-related complaints.
Overall, the process appears to be an efficient way of resolving consumer complaints.