Insurance firm’s lame excuse does not wash
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.