Tuesday, 4 March 2014

Questions (43)

Michael McGrath


43. Deputy Michael McGrath asked the Minister for Finance if he will clarify a matter concerning the Financial Services Ombudsman and the provisions of the Central Bank and Finance Authority of Ireland Act 2004 which has been raised in correspondence (details supplied); and if he will make a statement on the matter. [10658/14]

View answer

Written answers (Question to Finance)

Firstly, I must confirm to the Deputy that it is not appropriate for me to comment on or become involved in an individual borrower's dispute with a financial service provider. 

The Financial Services Ombudsman (FSO) was set up to adjudicate on unresolved disputes between complainants and financial service providers in an independent and impartial manner.  It would not be appropriate for me to comment on individual cases before him.

However, the Financial Services Ombudsman Bureau has informed me that Sections 57BX (3) and (3A) of the Central Bank Act 1942 (as amended) provide inter alia that:

(3) A consumer is not entitled to make a complaint if the conduct complained of- (a) is or has been the subject of legal proceedings before a court or tribunal ... (3A). Despite subsection (3)(a), the Financial Services Ombudsman may accept a complaint against a regulated financial service provider who has begun legal proceedings in relation to a matter to which the complaint relates, but only if that Ombudsman reasonably suspects that the regulated financial service provider has begun those proceedings in order to prevent the making of the complaint, or to frustrate or delay its investigation.

The FSO is of the view that there is nothing in the applicable legislation to prevent a financial service provider from issuing legal proceedings whilst a complaint is being dealt with by the FSO. It is the general view of the FSO that, in relation to complaints about a product that is still active, the terms and conditions relative to that product will continue to be applicable while the complaint is being investigated by the FSO. The contractual legal terms between the financial service provider and the complainant in relation to an active product continue to apply for example, loan repayments still have to be met. Conversely the legal rights of a provider to enforce its rights under the contract also continue to apply whilst the complaint is being investigated by the FSO. 

Where a complaint has been made to the FSO and a financial services provider subsequently issues legal proceedings whilst the complaint is being dealt with by the FSO, the FSO will make a determination as to his jurisdiction to continue with the investigation of the complaint, taking into account the above factors under Section 57BX (3) & (3A) in addition to the FSO's general discretion under two other sections of the Act: Section BX(2) of the Act which provides inter alia that the Financial Services Ombudsman has sole responsibility for deciding whether a complaint is within his jurisdiction and; Section 57BZ of the Act which provides: "(1) Without limiting section 57BY, the Financial Services Ombudsman can decide not to investigate a complaint, or to discontinue an investigation of a complaint, on the ground that - .... (d) there is or was available to the complainant an alternative and satisfactory means of redress in relation to the conduct complained of, ".

In circumstances where, in the opinion of the FSO, issues between the parties are more appropriately dealt with by a court in legal proceedings, the FSO may in the exercise of his discretion under these sections determine not to investigate or to continue to investigate a complaint on the ground that there is an alternative and satisfactory means of redress in relation to the conduct complained of. I am informed by the Financial Services Ombudsman Bureau that in each case where legal proceedings are issued, the FSO reviews that case on an individual basis, taking into account the particular circumstances of the case and taking into account the statutory provisions and criteria as outlined above and within the context of the legal powers available to the FSO. I am also informed by the Financial Services Ombudsman Bureau that the issuing of legal proceedings by a financial services provider does not automatically lead to the FSO ceasing investigation of that complaint.