In­surance firm’s lame ex­cuse does not wash

Irish Examiner - - Front Page - Alan Healy

An in­surance com­pany was or­dered to pay for the treatment of a dog’s lame paw af­ter its own­ers were suc­cess­ful in their com­plaint to the in­surance in­dus­try watch­dog.

The case was one of more than 400 for­mally in­ves­ti­gated by the Fi­nan­cial Ser­vices and Pen­sions Om­buds­man (FSPO) last year.

The om­buds­man up­held more than 200 of the com­plaints and is­sued legally bind­ing de­ci­sions in the bank­ing, in­surance, and in­vest­ment sec­tors.

The cou­ple, named John and Lucy, had taken out an in­surance policy for their pet dog in Jan­uary 2017. From the be­gin­ning, they said, the com­pany knew the dog was over­weight.

The pet sub­se­quently de­vel­oped a limp but the in­surer de­clined to cover the cost of treatment, which was in ex­cess of €700, cit­ing the ex­ces­sive weight of the dog.

A let­ter from the cou­ple’s vet pro­vided a pro­fes­sional opinion that said obe­sity was not the un­der­ly­ing cause of the dog’s lame­ness.

The om­buds­man up­held the com­plaint and di­rected the provider to pay the claim along with €300 in com­pen­sa­tion.

In an­other case, the om­buds­man or­dered a bank to pay a cou­ple €35,000 for over­charg­ing them in­ter­est on their mort­gage.

The cou­ple had hired an au­dit firm to review the in­ter­est charged by the bank who found they had been over­charged al­most €24,000 in in­ter­est.

In­for­mal me­di­a­tion was used to suc­cess­fully re­solve most of the com­plaints closed in 2019. Of the 439 com­plaints closed by way of a for­mal in­ves­ti­ga­tion which re­sulted in a legally bind­ing de­ci­sion, 201 were ei­ther fully, sub­stan­tially, or par­tially up­held, while 238 were not up­held.

The Fi­nan­cial Ser­vices and Pen­sions Om­buds­man (FSPO) up­held al­most half of all com­plaints it for­mally in­ves­ti­gated in 2019 is­su­ing legally bind­ing de­ci­sions in the bank­ing, in­surance and in­vest­ment sec­tors.

Over­charg­ing on loans, can­celling in­surance poli­cies and threats to close a bank ac­counts were amongst the is­sues the FSBO dealt with.

Ac­cord­ing to the de­ci­sions, a cou­ple, Maitiú and Mary hired an au­dit firm to review the in­ter­est charged by a bank on their mort­gage who found they had been over­charged €23,751.37 in in­ter­est. The bank re­sponded that the au­dit firm’s in­ter­pre­ta­tion was in­cor­rect, and af­ter performing its own re­cal­cu­la­tion on the ac­count, that it had, in fact, un­der­charged the cou­ple by €3,450.

In his de­ci­sion, the om­buds­man stated that the bank had made it ‘en­tirely un­clear what in­ter­est rate was ap­pli­ca­ble’ to the cou­ple’s loan ac­count. He up­held the com­plaint and di­rected the bank to pay €35,000 in com­pen­sa­tion for the to­tal­ity of the com­plaint.

Other de­ci­sions last year in­clude an order to pay com­pen­sa­tion of €15,000 to a com­pany af­ter a bank threat­ened to close its bank ac­count due to ‘out­stand­ing debt,’ which turned out to be an er­ror.

An in­surance com­pany who re­fused to cover treatment for a lame dog was also to pay for the costs along with com­pen­sa­tion.

In­for­mal me­di­a­tion was used to suc­cess­fully re­solve most of the com­plaints closed in 2019. Of the 439 com­plaints closed by way of a for­mal in­ves­ti­ga­tion which re­sulted in a legally bind­ing de­ci­sion, 201 were ei­ther fully, sub­stan­tially or par­tially up­held, while 238 were not up­held.

The om­buds­man Ger Deer­ing can di­rect a fi­nan­cial ser­vice provider to pay com­pen­sa­tion of up to €500,000 to a com­plainant and to rec­tify the con­duct that is the sub­ject of the com­plaint. There is no limit on the value of the rec­ti­fi­ca­tion that can be di­rected.

De­ci­sions is­sued by the FSBO are legally bind­ing on both par­ties and can only be ap­pealed to the High Court.

“I be­lieve it will be ev­i­dent to any­one who reads these de­ci­sions that the work of my Of­fice can have a very pro­ordered found im­pact on many of those who use our ser­vices,” Mr Deer­ing said.

“I be­lieve that these de­ci­sions play a very important role in im­prov­ing the con­duct of fi­nan­cial ser­vice providers.”

The om­buds­man will pub­lish 25 legally bind­ing tracker mort­gage de­ci­sions separately next month in order to il­lus­trate the breadth and com­plex­ity of the is­sues raised and given the in­ter­est in these par­tic­u­lar legally bind­ing de­ci­sions.

Ear­lier this month, AIB said it was set­ting aside an ad­di­tional €300m to help com­pen­sate 5,900 more tracker mort­gage tracker cus­tomers af­ter some of the group brought and won their cases at the FSBO.

Ger Deer­ing: De­ci­sions play vi­tal role in im­prov­ing con­duct of fi­nan­cial ser­vice providers.

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