That leave be granted to introduce a Bill entitled an Act to provide for the strengthening of the functions of the Financial Services Ombudsman, the consumer complaint procedure and related matters.
We are living in strange times where many people are facing eviction from their homes by banks that only survived because those same people bailed them out. Many lost their jobs as a result and now these banks are sending thousands of legal letters demanding payments. Yet the rules are weighted in favour of these banks and other financial institutions when a dispute arises or a complaint is made.
This Bill attempts to re-adjust that balance in favour of the consumer. It aims to make justice more accessible and affordable to people in conflict with a financial institution. I commend the Office of the Financial Services Ombudsman for the good work it does on behalf of consumers. Whether this Bill is passed or not, I believe that office should be playing a more active role in defending consumers, especially struggling home owners, trying to stand up to aggressive banks. I also pay tribute to the work of the Free Legal Advice Centre for its work on this issue, especially through its recent report, Redressing the Imbalance.
This is a short Bill focusing on the most immediate changes needed in legislation to give consumers a fighting chance when taking on a bank or other financial institution. There is an argument that a total restructuring of the domestic legislation is needed and the nature of EU law-making in this field leaves much to be desired. The Bill brings the definition of consumer in line with the version used in both the consumer protection code and in the Consumer Credit Act. The current definition is too broad and has led to a situation where the Financial Services Ombudsman is perhaps left without adequate time and resources to look after the interests of individual consumers.
The Bill would also remove the ombudsman’s obligation to act in an informal manner and without regard to technicality and legal form. These phrases add nothing to the legislation and their interpretation can lead to inconsistency. Section 4 moves to allow consumers make a complaint within the standard six years or within two years of becoming aware of an issue. This change has long been proposed and would be an important step in strengthening consumer rights.
The Bill places a new onus on financial institutions to engage in a mediation process. If they do not engage, then they must provide the Financial Services Ombudsman with convincing reasons for their refusal. Section 7 allows for the ombudsman to arrive at a wider range of findings to give a more accurate picture to the complainant. Critically, this Bill will make the appeals process more affordable for consumers, replacing the High Court with the Circuit Court as the forum for appeals. The use of the High Court discourages appeals and also limits the range of the appeal because of the so-called "curial deference". My Bill will permit a full re-hearing.
The Bill is a package of amendments aimed at redressing the imbalance in favour of the consumer. It aims to make access to justice for the small person affordable, timely and transparent.
I commend the Bill to the House.