Watchdog swamped with bank criticisms (The Irish Times)
Financial ombudsman Joe Meade continues to receive a “serious” volume of complaints about the mis-selling of financial products to elderly people, despite warning financial institutions to improve their practices in 2006.
Mr Meade said his office was inundated yesterday by calls from consumers following the broadcast of an RTÉ Prime Time programme that showed an 82-year-old mystery shopper being advised to place her €120,000 inheritance into an unsuitable investment bond by Permanent TSB staff. Two members of staff were shown giving inaccurate information about the bond.
More than half the financial advisers approached by the mystery shopper recommended bonds where the money would be tied up for between five and 10 years.
Such products are not suitable for older people who do not have other income, assets or savings because they impose financial penalties if the money is withdrawn within the term of the bond, perhaps to pay for nursing home care. In the event of the person’s death, their estate cannot be finalised.
Mary O’Dea, consumer director at the financial regulator, told RTÉ that its review had found there was no systemic mis-selling of financial products to older people. However, Mr Meade said he had published 10 case studies showing elderly people had been treated badly by financial institutions. He said he planned to highlight several more such cases in his next report in July.
Permanent TSB chief executive David Guinane admitted incorrect information had been given to the 82-year-old woman, but said the bank’s safeguards against mis-selling would have kicked in before any formal sales process.
Mr Meade said there was no point in financial institutions having sales guidelines in place if they were not checked. “In this era, with staff turnover, your staff has to be properly trained and it has to be taken seriously at management level.”