Dáil Éireann Debate, Wednesday - 1 June 2005
41 Mr. O’Shea asked the Minister for Finance if he has satisfied himself that there are sufficient procedures in place to provide for the adequate supervision of banks, in view of the continuing disclosures of incidences of overcharging by banks and financial institutions; and if he will make a statement on the matter. [18283/05]
View answerThe Central Bank and Financial Services Authority of Ireland Act 2003 established the Irish Financial Services Regulatory Authority. The post of consumer director is specifically provided for within the structure of the financial regulator established under that Act. The director exercises important consumer protection powers under legislation, including those under section 149 of the Consumer Credit Act 1995, as amended, which provides for the regulation of fees and charges imposed by credit institutions.
The Central Bank and Financial Services Authority of Ireland Act 2004, complemented the 2003 Act, further enhanced the financial regulator's powers and strengthened the regulatory environment. This Act conferred new powers on the financial regulator to impose stiff administrative penalties, to be applied where there is a breach of: any financial services legislation, codes of conduct issued by the regulator or any condition, requirement or direction imposed under legislation or codes.
The Act also provided for an enhanced structure for dealing with consumers who have complaints about financial institutions and also provides consumer and industry consultative panels for the financial regulator. The consumer panel will have an important role in ensuring that the regulator is fully reflecting the interests of consumers in its protective issue of codes of conduct and educational — information pamphlets, etc. — roles. The Act also established a single statutory Financial Services Ombudsman for all financial services firms. The Ombudsman's office began operations on 1 April 2005. The Ombudsman has significant powers of investigation, mediation and adjudication and may order redress in appropriate circumstances.
The increased focus on consumer protection issues since the establishment of the financial regulator has led to a significant increase in the number of charging issues coming to light as credit institutions review their systems and compliance at the regulator's behest. Many of these issues arise because of human error and in some instances the errors continued over an extended period. The financial regulator expects that charging issues will continue to emerge for some time until credit institutions have completed their reviews and any necessary system and procedural changes and controls have been implemented.
In view of the legislative measures outlined above, I am satisfied that a robust regulatory structure for the protection of consumers is now in place and that it continues to function satisfactorily. This structure is proving effective in detecting overcharging issues in the first instance, and thereafter in ensuring that the customers affected are reimbursed and that the financial institutions concerned put in place the systems required to avoid a recurrence.
