THE FINANCIAL SERVICES and Pensions Ombudsman has detailed a number of cases it dealt with last year, after receiving some 5,692 complaints.

In its annual report for 2018, the ombudsman’s office said 56% of the eligible complaints related to banking products, 33% were about insurance and 5% related to investment products.

The remaining 6% concerned complaints about pension schemes.

In one case study in today’s report, a couple had their claim for storm damage rejected. They owned a house with an extension that had sustained significant damage and their insurance company denied the claim because it found the extension was not of standard construction and was built with non-compliant materials.

Their insurer was of the view that the couple should have known that this was the case when they bought and insured the house.

During the course of the ombudsman’s mediation, the couple said an engineer’s report, which they had seen before they bought the property, certified that all was well and that the planning permission granted by the relevant local authority showed nothing amiss.

They said the extension had been blended so well into the original structure with plastering and painting that it was impossible to tell where the old house ended and the extension began.

They also argued that they had no professional background in building, architecture or engineering, which could have helped them identify a problem with the house. An agreement was reached between the parties that the couple would receive €40,000.

Motor insurance

According to the annual report, motor insurance was the main product type complained about, representing 29% of insurance complaints.

In one case, a man was told his insurance company would not cover the call-out fee for the fire service after a car crash.

Another vehicle had crashed into his car and when a bystander saw smoke coming from it, they called the fire service. The man had fully comprehensive insurance and assumed that everything would be covered by his policy.

He later found out that the policy limited the fire cover to where the fire service had to cut passengers out of the car or put out a fire.

The man had managed to get out of the car himself and though there was smoke from the engine, it did not catch fire. The local authority presented him with an invoice for the fire service and the insurance company refused to pay it.

He did not know who called the fire service and could not understand how he was now being charged for it. He argued that he was unable to take out any further insurance to cover himself for this fee, and that surely “comprehensive insurance” was “comprehensive”.

In response, the insurance company quoted the part of the policy that allowed them to reject the claim.

During the ombudsman’s mediation, the insurer agreed to pay the fee of €515.63 when the local authority refused to waive it.

Ombudsman Ger Deering expressed concern about cases in which insurance companies cancelled policies after claims were made by customers.

“Where a person has an insurance policy cancelled by an insurance company due to alleged non-disclosure, or for whatever reason, this can have serious implications and render it very difficult, and in some instances almost impossible, for that person to get any sort of insurance cover subsequently.

I firmly believe the voiding of an insurance policy is something that should not be done lightly. To avoid the risk of non-disclosure and the potential voiding of policies, I hold the view that insurance companies and insurance intermediaries should ask questions prior to the inception of a policy in a clear manner and ensure that customers are clear on what they are being asked and the potential consequences of answering incorrectly.

“Furthermore, insurance companies should exercise caution and prudence when considering cancelling an insurance policy and should not take steps which might reasonably be considered disproportionate,” he said.

Tracker mortgage scandal

Last year, complaints by consumers about the conduct of their financial service provider in relation to mortgages, made up the largest category (32%) of complaints received in 2018 at 1,766 complaints. Tracker mortgage complaints comprise a large element of these.

To date the Central Bank’s examination has resulted in almost 40,000 borrowers being returned to tracker mortgages.

“In July 2018, as the examination progressed we began to take complaints that could potentially progress, off hold. The duration required to investigate a complaint can vary depending on the number of submissions made by the parties to the complaint. This sometimes involves an extensive exchange of evidence and submissions. Each complaint is considered on its own merits,” Deering said.

“In 2018, we received 723 complaints in relation to tracker mortgages. 153 tracker mortgage-related complaints closed in 2018, which meant that at year-end we had 1,221 tracker mortgage complaints on hand. I expect this office to close a significant number of tracker mortgage complaints in 2019.”