Nearly 6,000 complaints about financial institutions were made to the Financial Services Ombudsman last year. This is an increase of over a third on the number received in 2007.
Ombudsman Joe Meade has said he is concerned that some credit unions may be exposing members' funds to 'unacceptable risk'.
The Financial Services Ombudsman received 5,950 complaints last year. 2,600 of those were against credit institutions while 3,300 complaints were about the insurance sector. Almost one in six complaints were about investment issues.
The Ombudsman Joe Meade has contacted the Registrar of Credit Unions in the Financial Regulator's office in relation to how credit unions invest money after one credit union signed up for a deal which lost €1m of members' funds.
He said that on the basis of that case, he was concerned about how credit unions and the brokers who were advising them might be operating and might be exposing members' funds to 'a degree of unacceptable risk'.
The credit union sought to be reimbursed by the investment broker who advised the investment. The Ombudsman, after oral hearings, found that the broker's presentation to the credit union had been inadequate and that it had failed to tell the credit union that it was possible that all of the investment could be lost.
But the Ombudsman also found that the credit union's investment committee 'could not absolve itself 'from the disaster which occurred' and 'blindly signed' the application form. He awarded the broker to refund the credit union €500,000. The credit union has appealed to the High Court.
Couple sought compensation from bank over tax
In relation to another case - involving the incorrect identification of a bogus non-resident account holder - the Ombudsman re-iterated his policy that he would not compensate anyone for tax unpaid, concealed or understated.
In this case, a couple's names were submitted to Revenue by a bank as bogus non-resident account holders. The Ombudsman found the bank had been negligent as the couple never had such as account.
But, as a result of the notification, a Revenue investigation found that they had a liability to income tax. They made a €200,000 settlement and their names were published in the defaulters' list.
The couple sought a refund of the €200,000 and compensation from the bank, but the Ombudsman said their undisclosed tax liability was caused by problems with their own tax affairs, rather than by a breach of duty by the bank. He awarded the couple €12,500 compensation.
