Dáil Éireann debate -
Thursday, 8 Feb 2024

Vol. 1049 No. 3

Financial Services and Pensions Ombudsman (Amendment) Bill 2023: Second Stage

Minister for Finance (Deputy Michael McGrath)

I move: "That the Bill be now read a Second Time."

I welcome the opportunity to engage today on the Financial Services and Pensions Ombudsman (Amendment) Bill 2023. As Deputies are aware, the Government published the Financial Services and Pensions Ombudsman (Amendment) Bill 2023 on 19 December 2023. Today's Second Stage debate on the general principles of the Bill is an important step in the progress of this legislation. The Bill will ensure the Office of the Financial Services and Pensions Ombudsman, FSPO, can continue to carry out its statutory functions in line with the Constitution and will strengthen protections for financial consumers in Ireland. The FSPO was established on 1 January 2018 by the Financial Services and Pensions Ombudsman Act 2017, as amended.

The FSPO is a critical part of the consumer protection framework in Ireland, providing an independent, impartial, fair and free service that helps to resolve complaints from consumers, including small businesses and other organisations, against regulated financial service providers and pension providers. When consumers are unable to resolve a complaint or dispute with their provider, they can refer their complaint to the FSPO. The FSPO resolves complaints through one of two ways. The first is through informal mediation, helping consumers to reach an agreement with their provider, ultimately leading to a potential settlement agreed between the parties. The other way of resolving complaints is through formal investigation and adjudication, including oral hearings if required, leading to a legally binding decision which is subject only to a statutory appeal to the High Court.

The amendments proposed to the FSPO Act by the Bill before us today are a result of the ruling in the Zalewski v. Adjudication Officer and Workplace Relations Commission, Ireland and the Attorney General. In that ruling, the Supreme Court held that the exercise of powers by adjudication officers pursuant to Part 4 of the Workplace Relations Act 2015 was the administration of justice under Article 34 of the Constitution. The administration of justice, in accordance with Article 34, is normally preserved for the courts. However, the Supreme Court found that the administration of justice as carried out by the adjudication service is permissible within the meaning of Article 34 of the Constitution, as the administration of justice was limited. In light of this ruling and throughout the drafting of the Bill, the Department has held a series of consultations with relevant stakeholders, particularly the Office of the Attorney General and the FSPO. These consultations are to ensure the necessary amendments arising from the Zalewski ruling are put in place and to ensure the FSPO continues to administer justice within the meaning anticipated by Article 34 of the Constitution. This includes the possibility of holding hearings in public where deemed appropriate. The published Bill also provides for a number of improvements to the FSPO Act via targeted amendments, clarifications and corrections of typographical errors.

The detailed heads of Bill were published on 9 April 2023 and the Bill underwent pre-legislative scrutiny on 10 May last year, before publication of the Committee on Finance, Public Expenditure and Reform, and Taoiseach's report on 16 June 2023. I welcome the scrutiny report of the joint committee, which has provided a useful service to this House and highlighted important points in its recommendations. The report, in its analysis of the general scheme of the Bill, recommended changes that bring further clarity to the Bill. The pre-legislative scrutiny recommendations were carefully considered by my officials in liaison with the Office of Parliamentary Counsel in the Office of the Attorney General. I have reviewed the committee's recommendations and I can assure Deputies these recommendations have been addressed in the published Bill where it proved feasible and appropriate to do so. This includes adopting the committee recommendations on the inclusion of affirmation in addition to oath and consideration of the FSPO's interaction with the credit reviewer. I look forward to discussing these and other provisions in detail with colleagues on Committee Stage as the Bill progresses through the Houses of the Oireachtas.

I should also flag at this stage that I will be seeking to introduce one further amendment on Committee Stage. This amendment will provide the ombudsman with the discretion to identify the parties to a complaint in a decision, case study or report where a public oral hearing has been held as part of the investigation by the FSPO. It also arises from the Zalewski ruling. My officials are currently engaged with the Office of the Attorney General to finalise the drafting of this amendment.

I will now outline the main provisions of this Bill. First, I will give an overview of the main amendments being made to take account of the Zalewski ruling. I will then summarise the other amendments proposed in the Bill.

Section 13 provides that the ombudsman may require any person to attend before him and be "examined and cross-examined on oath or affirmation". This updates the principal Act to include a provision for cross-examination and provides for a person to make an affirmation in place of taking an oath.

Section 16 provides that the ombudsman is required to take a decision whether to hold oral hearings as provided for in section 12(1)(c) of the Act and as conducted, under section 47(3), in public. This decision is to be taken after consultation of the parties concerned and consideration of the nature or circumstance of the complaint or otherwise in the interest of justice. This is one of the key amendments arising as a result of the Zalewski ruling. It provides for the possibility of oral hearings in public with a view to mitigating the risk of a potential constitutional challenge to section 56(4) of the Act, which currently provides that investigations are conducted otherwise than in public. This amendment is considered appropriate, given that it was the absolute prohibition on public hearings to take evidence from witnesses at the WRC which was considered by the court to be repugnant to the Constitution in the Zalewski ruling.

Section 17 provides that mediation shall always be conducted in private. This is considered to provide important comfort to complainants who otherwise may be disinclined to submit complaints to the ombudsman. The procedures of the FSPO greatly encourage mediation between the parties on a voluntary basis so that every effort can be made to facilitate the resolution of complaints in a way that empowers the parties themselves to design and agree a confidential solution. This is in accordance with the provisions of section 58(1) of the Act which requires the ombudsman to try, as far as possible, to resolve a complaint by mediation. Mediation by its very nature is a confidential process which facilitates discussion between the parties on an off-the-record basis. Given that mediation is one of the various forms of investigation anticipated by section 12(1) of the Act, it would be contrary to the Act and the well-established procedures for conducting mediations for any FSPO investigation by way of mediation to be conducted in public. As such, an amendment to section 58 is proposed to ensure mediation shall always be conducted in private.

Section 18 outlines that a person who gives evidence on oath or affirmation that is false, and that he or she knows to be false, has committed an offence and is liable on summary conviction to a class A fine or to imprisonment for a term not exceeding three months or both.

Now that I have updated the House on the proposed amendments arising from the Zalewski ruling, I will turn to an overview of the other proposed amendments to the FSPO Act.

Section 1 is a standard provision, defining that the term "principal Act" in this amendment Bill refers to the Financial Services and Pensions Ombudsman Act 2017.

Section 2 amends the interpretation section of the principal Act. In particular, it clarifies that the FSPO has the statutory power to investigate complaints against a financial service provider or pension provider which met the definition of financial service provider or pension provider as defined in the principal Act at the time of the conduct complained of, even if said provider ceased to meet the definition of financial service provider or pension provider as defined in the principal Act before the complaint was made to the FSPO or before the FSPO's investigation of the complaint has been concluded. This section also defines the term "credit reviewer". This proposed amendment is intended to eliminate any ambiguity in the interpretation of the legislation provisions and confirm that the FSPO can investigate firms which may no longer meet the definition of a financial service provider or pension provider at the time of a complaint. This is the interpretation long since taken by the FSPO and its predecessor body, the Financial Services Ombudsman's Bureau, in the previous governing legislation from April 2005. Having considered the matter carefully, in conjunction with advice from the Office of the Attorney General, the proposed legislative amendment seeks to further provide clarity to confirm the position taken by the FSPO to date with respect to the existing statutory powers underpinning the investigation of complaints of this nature.

Section 3 outlines the methodology of calculating expenses via percentage split charged to the financial services sector, by a levy for financial services complaints and expenses charged to the Exchequer for pensions cases.

Section 6 outlines the process for appointing an acting ombudsman during an absence of the ombudsman in a number of scenarios. This includes providing a statutory basis for a member of staff to assume the position of acting ombudsman where there is no deputy ombudsman at that time.

There is a series of amendments to various sections of the Financial Services and Pensions Ombudsman Act 2017 to reflect the potential for there to be more than one person appointed as deputy ombudsman.

This point is facilitated by amendments to sections 4 and 5, and sections 7 to 11, inclusive.

Sections 12 and 14 clarify the respective remits of the FSPO and the credit reviewer. To expand on how that works in practice, the credit reviewer makes a recommendation regarding a participating bank's lending decision as a result of which the participating bank may decide to approve the loan. The FSPO's jurisdiction does not overlap because the FSPO will not interfere with the commercial discretion of a financial service provider or a recommendation of the credit reviewer. However, a consumer may make a complaint to the FSPO regarding the conduct of a bank in how it processed the application. I thank the Committee on Finance, Public Expenditure and Reform, and Taoiseach for its helpful suggestion in its pre-legislative scrutiny report relating to the drafting of the amendment on this point.

Section 14 also corrects a cross-referencing error. This amendment clarifies that the ombudsman may accept a complaint where a financial service provider or pension provider has initiated legal proceedings in relation to a complaint where the ombudsman believes, based on reasonable grounds, that the provider has initiated these proceedings in order to frustrate or delay its investigation.

Section 15 will allow the Minister for Finance to make regulations that require financial service providers, or certain classes thereof, and pension providers, or certain classes thereof, to establish internal dispute resolution procedures for dealing with complaints and to publish their internal dispute resolution procedures. Currently, there is no statutory obligation for pension providers to have internal dispute resolution processes in place. Furthermore, the regulation-making power as currently drafted would require the regulations to be applicable to all entities that meet the definition of pension provider. This amendment would allow regulations to be made that require internal dispute resolution processes to be established by those who are responsible for the management of the scheme, such as trustees, personal retirement savings accounts providers or, in the case of a public authority scheme, the Minister or Ministers to whom there is a right of appeal.

Section 19 is to correct a typographical error in section 62 of the Act, which refers to a decision of the ombudsman under sections 61 or 62 in respect of a complaint, rather than to a decision of the ombudsman under sections 60 or 61 in respect of a complaint.

Section 20 is a standard provision giving the Title of the Bill and when it will come into effect.

To summarise, the Financial Services and Pensions Ombudsman (Amendment) Bill 2023 will update the 2017 principal Act to take account of the Zalewski ruling by making targeted amendments that provide that the ombudsman is required to take a decision on whether to hold oral hearings in public; the processes around oath-taking and affirmations in oral hearings are clarified; and that mediations shall be conducted in private. This is complemented by a number of improvements to the wider Act through targeted amendments. These measures will strengthen the functions and robustness of the office of the ombudsman and improve the consumer protection framework for customers of financial services and pension providers, an aim I am sure we all share in the House. With that in mind, I look forward to engaging with Members on the Bill in the hope it can be sent forward to Committee Stage for more detailed discussion and examination, and to listen to proposals from colleagues across the House.

Deputy Pearse Doherty

Tógfaidh mé deich nóiméad agus tógfaidh mo chomhghleacaithe anseo cúig nóiméad an duine. Gabhaim buíochas leis an Aire as an Bhille seo a chur i láthair. Bunaíodh an FSPO anseo agus chuaigh sé i mbun a chuid oibre in 2018.

The FSPO was established and began its operations in 2018. Its primary function is to receive, investigate and endeavour to resolve consumer complaints regarding the conduct of financial services and pension providers. Crucially, this is free of charge. The role of the ombudsman is so important. It is essential that the FSPO works as intended. I will return to that broader issue at the end of my contribution.

There are 20 sections in this legislation. I will discuss some of the key themes and provisions provided for in the Bill. As the Minister mentioned, one of the key purposes of the Bill is to ensure that the ombudsman can continue to carry out its functions in light of the Supreme Court ruling in what is called the Zalewski case. This case was concerned with the processes and procedures used by the WRC, when it adjudicates on employment-related disputes. The Supreme Court judgment found that the WRC's adjudication processes amounted to an administration of justice for the purposes of Article 34.1 of the Constitution with, therefore, ramifications for a number of issues, including the holding of public hearings. In response to that judgment, the WRC implemented a number of changes to its procedures and processes, with the Oireachtas adopting legislation in 2021 to address the deficiencies in the WRC's processes, as identified in that Supreme Court judgment. This has resulted in other bodies with quasi-judicial functions, such as the FSPO, also reviewing their processes and procedures.

This proposed legislation gives effect to the Zalewski case judgment to ensure that the FSPO can continue to carry out its functions in accordance with the Constitution. A number of sections in the legislation give effect to that. Section 13 seeks to clarify that the ombudsman has the power to require any witness to be examined or cross-examined under oath or affirmation, which was a key finding of that judgment. Section 56(4) of the 2017 Act currently requires the ombudsman to ensure that where oral hearings are deemed necessary, they are conducted in private. Section 16 of the proposed legislation amends this section of the 2017 Act to allow oral hearings to take place in public in certain circumstances. I am sure this provision will be discussed in detail on Committee Stage. It is of vital importance that legislative changes are made to ensure that the FSPO can continue to discharge its important duties. I look forward to discussing with the Minister on Committee Stage the provisions of the Supreme Court judgment and their implications as we deal with them in this legislation.

The legislation also concerns very important issues I raised during pre-legislative scrutiny, including the power of the FSPO to investigate a complaint against a financial services provider where it is not regulated by the Central Bank. Section 2(b) of the Bill clarifies that the FSPO can investigate complaints against entities that meet the definition of a financial service or pension provider at the time of the conduct complained of, even if it ceases to meet the definition before the complaint was made or the investigation concluded. This ensures that customers of financial service providers that have departed the Irish market, for example Ulster Bank or KBC, can continue to access the services and protections offered by the FSPO. That is a good thing. I welcome the provision set out in section 2 of the Bill.

There is, however, another very serious related issue, which I will raise. It is where a complaint is made against a financial service provider that currently falls under the definition of the 2017 Act, but did not at the time when the conduct complained of occurred. In the 2017 Act, a financial service provider is defined as a regulated financial service provider, whose business is subject to regulation by the Central Bank. Here we have a problem. As the Minister knows, approximately 80,000 mortgage loans are held by vulture funds. The Minister also knows that I and Sinn Féin argued strongly against the sale of these loans by retail banks to vulture funds and warned of the negative outcomes that would arise for consumers. We can all agree my concerns have proven to be well-placed. Fine Gael told us that these borrowers would lose no - none whatsoever - consumer protections following the sale of their mortgage loans to vulture funds. The Minister will agree that being able to avail of the services of the FSPO is a key consumer protection. I am aware, however, of individuals who have had their loans held by vulture funds, and sought to complain to the FSPO regarding the conduct of these funds, but have been told by the FSPO that they cannot be investigated. This is because at the time of the conduct being complained of these vulture funds were not regulated.

The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 came into effect on 8 July 2015, while the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 came into effect on 21 January 2019. Before July 2015, neither the vulture funds owning the loans or the firms servicing them were required to be regulated, so the FSPO cannot investigate conduct prior to this date with respect to either the fund or the credit servicing firm. Even after 2015, when the credit servicing firms were required to be regulated, the vulture funds owning the loans were not required to be regulated under the 2018 Act, which requires the vulture funds owning the loans to be regulated and which came into effect only in January 2019. Even still, many of these vulture funds did not even ask or seek authorisation until months later. As a result of all this, what we have now are thousands of mortgage holders with loans held by vulture funds who simply cannot make a complaint about the conduct of these funds where the conduct occurred prior to 2019 or, in many instances, even during 2019.

This is happening. It is a serious issue. The FSPO has made determinations on this issue and they are crystal clear. They are basic things people would expect to be able to make a complaint about, like the assessment of your standard financial statement, for example. If that happened before 2019 and if your loan is with a vulture fund, the FSPO is of no assistance to you. These are loans that were unfairly sold to vulture funds, which do not now have equal access to the Financial Service Pensions Ombudsman, despite all of the commitments we heard at the time. It does not appear to me that this Bill addresses the gap in legislation. I appeal to the Minister that he accommodate us to ensure this issue is dealt with. I would appreciate if he would clarify his position on the cases I have just outlined, and that the financial services ombudsman has no jurisdiction to investigate complaints into key decisions a fund should make, and which happened prior to 2019. I understand this gap is not being dealt with in this legislation and would welcome the Minister's views on the ability to close this gap on Committee Stage. I would be happy to work with him and with his Department to rectify this issue through amendments on Committee Stage to benefit consumers. This legislation does allow for the FSPO to investigate complaints that happened even when a regulated entity is no longer a regulated entity. However, the reverse does not happen and we need to address that urgently.

I turn to the general issue I mentioned at the beginning of my contribution, which is ensuring the FSPO works as intended. The Minister will be aware, because I have raised this at length many times, of the length of time it takes the FSPO to resolve complaints. It is the view of a number of financial advisers that the FSPO is no longer fit for purpose, with long delays in the adjudication and resolution of complaints. Indeed, some complainants are being told that it will take up to three years for a decision to be made about their complaint. It has been reported the ombudsman informed one consumer that the average time for the assignment of a complaint to an adjudication officer is between 12 and 15 months, with it then taking an average of another 12 to 18 months for a preliminary decision to be made. That is between two and three years from a complaint to a preliminary decision. We can all agree the FSPO is a crucial service that must work well for consumers. Financial advisers are warning the service has collapsed, which is of great concern and must be addressed. Under the directive of alternative consumer dispute resolution it states, "A properly functioning ... [alternative dispute resolution] entity should conclude online and offline dispute resolution proceedings expeditiously within a timeframe of 90 calendar days starting on the date on which the ADR entity has received the complete complaint file". I would welcome the Minister's views on the application of this directive, on the functions of the FSPO, and how they are being adhered to.

I have separately raised with the Minister the option of introducing an independent assessor to the FSPO. This would be independent of the ombudsman and could consider the standard of services provided by the FSPO to investigate or review complaints regarding its standard of service and to make determinations that would include the FSPO being required to apologise or pay compensation where the independent assessor judges that services have not met the requisite standard. The Minister may reference the FSPO council, as the FSPO has done in response to me, but this council has no role in dealing with complaints. There is an internal unit to examine and address complaints about the FSPO's performance, but it is not independent. These are issues I raised with the ombudsman at committee last year, and it acknowledged an independent assessor would bring benefits. I again ask the Minister to consider this proposal.

As I said at the start, I welcome many of the provisions in the legislation ensuring the FSPO can function in light of the Zalewski judgment and the provisions where financial service providers have left the market. I look forward to further scrutiny of the legislation on Committee Stage, including considerations of issues I have raised today. I strongly urge the Minister to close the gap for people who wrongly had their loans sold to vulture funds, and who were given commitments by the then Minister for Finance, Deputy Donohoe, that the supports and protections would remain. It is not true. It is simply not true. It is a blatant mistruth and we have determinations from the FSPO to show that. It is not acceptable. People should have that right. It is a basic protection. I know the Minister raised the issue of regulating service credit. Nobody on the finance committee at that time would have liked to have seen this situation arise. It has arisen now. There are thousands of people caught by this and it needs to be dealt with.

Deputy Martin Kenny

We welcome many of the provisions in this Bill, and it goes some way to dealing with the difficulties people have. As Deputy Doherty has outlined, there are many people who are in serious difficulty and who are finding it hard to manage because their loans have been sold to vulture funds, which do not fall under this and do not have access to any recourse when they have a complaint or difficulty. Some of these funds are extremely rude and obnoxious in the way they deal with people. They ring up, make demands, put pressure on and then more pressure on. People feel under huge strain. I deal with this in my own constituency, and I am sure the Minister deals with them in his constituency too. We know them all over the country. Yet we find we can do little when it comes to trying to resolve these issues. That is where the firm hand of Government has to come in to provide some recourse for its citizens so they can get fair play.

Going back ten years or more, we had the crash in the economy and many people were left in huge distress when they found the properties they bought were in serious negative equity. They found they had large loans they were unable to meet. Banks and financial institutions put huge pressure on individuals and small businesses and left them in a situation where they practically bankrupted them and destroyed their lives. As the Minister knows, many people were in serious distress to the stage their mental heath suffered seriously as a consequence. I believe we now have an obligation, in what to some extent are better times, to put provisions in place to ensure those kinds of scenarios never play out again. That is why it is so important to get these particular pieces of legislation correct. The Financial Services and Pensions Ombudsman can be, if done properly, a key player in that. That is why I think the recommendations brought forward by the Minister in this legislation go some way to deal with this.

However, it does not go all the way because it leaves that huge gap where so many people have loans sold to vulture funds and agencies, many of which are not within the State. You only deal with an agent for an agent for the holder of the loan. It leaves a terrible situation for many people. While we welcome this legislation and want to move forward with it, we hope the Minister sees the good sense in adopting some of the amendments that will come forward to try to deal with this so we can give this body the teeth it requires to stand up for ordinary citizens, small businesses and people who have had huge difficulties in the past and to ensure that can never happen again.

Many of the provisions are laudable. We want to see mediation and people having the opportunity to discuss what solutions can be found and brought forward to resolve these situations amicably rather than going to court and so on and people seeing their property repossessed. We need to see that happen. There is a situation in my constituency where an individual had a good business. However, with the encouragement of the financial institution, it was suggested to him when he had money in the bank that he should invest it in something. The institution would give him the extra and he was advised to buy property with it, because it was doing well and he would have an opportunity. He did that, and when the bubble burst and everything went wrong, the same institution repossessed his business, left people unemployed and destroyed his and his family's life. We want to ensure that type of situation can never happen again. That is why this particular legislation and other similar provisions are urgently required to deal with this.

Deputy Ruairí Ó Murchú

The Financial Services and Pensions Ombudsman is an independent, impartial, fair and free service that helps resolve complaints from consumers, including small businesses, against financial service providers and pension providers. I do not think anyone would argue against such a body. We need to give the powers to such a body to be able to deliver for regular people.

While we accept that there have been some positive moves in this regard - Deputy Doherty spoke about how the customers of Ulster Bank and KBC, which have left this jurisdiction, now have this facility to resolve their issues – Deputy Martin Kenny set out the issues facing people who have unfortunately had their mortgages bought by vulture funds. Each of us has dealt with vulture funds and engaged with people who were at their wits’ end following interactions with them. We know that there are issues around how those bodies have been dealing with people since before 2019. Those issues need to be addressed.

We have all heard the stories in the public domain about the scandalous lengths of time people have spent trying to use the FSPO. Justice needs to be swift, and we could be speaking about people in very constrained financial straits. It is good that we will increase this facility’s remit. I would like to think that there will be enough interaction between the Government and Opposition to ensure that we catch all of the people who have fallen between the stools. Even those who can avail of the service are, at times, experiencing waiting times of two or three years. Some of that period is lost because of the time spent assigning to an adjudicator. We need to resolve these issues. We will have an opportunity on Committee Stage to do this, and I would like to think we will.

While I have the Minister, I might raise an issue regarding the tech sector. We have had news across County Louth. Some of it has been good, and some of it not so good. The Minister and the Minister for enterprise need to examine the tech sector and what may be coming down the line. The good news has to do with Pentagon Technologies in Dundalk and its new precision parts cleaning facility, with 100 jobs to be created over the next couple of years. That is welcome. We know of the issues affecting the semiconductor industry, but it is booming, which is also welcome.

Not for the first time, I will raise the issue of PayPal. We know that a process is ongoing. I have spoken to the Minister for enterprise about it. The 205 jobs affected will be split between a Dublin facility and what was formerly the Dundalk facility. The total number of jobs is 1,800, which is a considerable number. I would like there to be some governmental interaction on this. The word coming out of the 30-day consultation process is that those who got redundancies last year may have been offered a better package than what is being offered now. It might only be statutory redundancy plus two whereas the previous package was statutory plus six. I would like to think that conversations will be had where necessary. All Louth Oireachtas Members will have got word today about Glen Dimplex. There has been investment and reorientation, but there are 230 jobs or thereabouts in Dunleer and there could be approximately 70 job changes. I would like to think that as few of those as possible will be job losses. In fairness, this relates to-----

An Leas-Cheann Comhairle

Deputy, we are over time and outside the scope of the Bill.

Deputy Ruairí Ó Murchú

I understand that, but I would like to think there will be governmental interaction to ensure we have as few job losses as possible. Some of the news is positive – that having to do with future jobs – but there are families and so on that have received very bad news.

An Leas-Cheann Comhairle

I have given the Deputy great flexibility.

Deputy Ged Nash

I am happy to defer to my colleague from Louth. It seems that 60% of the contingent of Louth Deputies are now present in the Chamber. I was not aware that there was that much interest in the Financial Services and Pensions Ombudsman (Amendment) Bill, but I am pleased to see there is. I am also pleased to have the opportunity to contribute on this Bill. The Labour Party supports this legislation and we may table Committee Stage amendments if required.

The FSPO has, in the main, served citizens well. It is important that it continue to be well resourced and retain the confidence of the public. These are matters that I will return to in my contribution.

When we distil the Bill down to its basic framework, its essence seeks to do two things: ensure that customers of financial service providers that have departed the Irish market can continue to avail of consumer protections and access the FSPO, and make legislative provision for the Zalewski judgment and ensure that the FSPO continues to discharge its statutory functions in accordance with the Constitution.

The Zalewski case found that hearings of the WRC should be held in public. This has direct implications for bodies with the statutory functions of the FSPO and many other equivalent bodies that are engaged in forms of administration of justice, broadly defined. As it stands, the legislation establishing the FSPO needs to be amended to take account of the wide-ranging implications of the judgment and to allow the office to continue carrying out its important work on behalf of citizens and financial services firms. In its judgment, the Supreme Court also held that the exercise of powers by the adjudication officers of the WRC involved the administration of justice under Article 34 of the Constitution, as already mentioned by other Deputies. This was a significant and important ruling for workers and has had obvious consequences for bodies such as the FSPO.

Section 56(4) of the Financial Services and Pensions Ombudsman Act 2017 reads: "The Ombudsman shall, without prejudice to the form of investigation, ensure investigations are conducted otherwise than in public." This Bill amends the 2017 Act so that, where the Ombudsman determines that it is appropriate or desirable for a complaint investigation to include an oral hearing, the Ombudsman shall decide whether to conduct any such oral hearing in public or in private, "having consulted with the parties to the complaint and having considered the nature or circumstances of the complaint and whether it is in the interests of justice to do so". Given that it is a core tenet of justice that it be conducted in public, with transparency as a cornerstone of the common law system, this proposed wording gives a great deal of discretion to the Ombudsman. That discretion has to be used cautiously.

That being said, and having read the transcripts of the pre-legislative scrutiny hearings - I do not have the benefit of being a member of the committee - I am largely persuaded that this discretion is to be applied in the best interests of the citizen who might make a complaint and have it dealt with all the way through the process. The last thing that anyone would want is for an individual’s personal financial situation or health and medical situation to be discussed at a public hearing. That would not be appropriate. Such situations arise in public forums from time to time and bodies such as the FSPO need to be very mindful of that. This is the nature of the business that the likes of the FSPO does.

It is important that these powers of discretion as to when hearings are to be in public or not are circumscribed and used in an informed and consistent way, can be justified and at all times are in accordance with the Zalewski judgment and the constitutional requirements. It is important that the performance of the office in this regard be kept under review and that this provision in particular be subject to frequent formal review. The changes made at the WRC on foot of the Zalewski case are different when put side by side with the way in which this legislation envisages the FSPO's future operations, so we have to keep a watching brief on the FSPO's performance, given the wide-ranging powers of discretion that the House is being asked to provide to it.

From figures I read a year ago that were given to the Sunday Independent, from June 2022 to March 2013 the FSPO received over 100 complaints relating to the exit of banks and other financial services providers from the Irish market. In some respects, this may be considered a small number, given the fact that, in 2022, nearly 700,000 accounts were closed at Ulster Bank and KBC as they prepared to exit the market. As the FSPO acknowledged at the time, however, some customers were experiencing real problems with their exiting banks, or in some cases their receiving banks, and these problems were “seriously impacting their lives.”

It was heartening at the time to read that most of those complaints, according to the FSPO, were resolved early in the complaints process. That is a good thing and is as it should be. That, in itself, is an expression of the importance of an independent adjudication process and vindicates the very existence of the FSPO.

I note with interest the Department’s periodic review of the FSPO, which was published last June and made a couple of important recommendations. Two things stood out for me in section 2 of the review, the first of which was the need for greater awareness of the role and functions of the office among younger people and among what the review describes as "certain social classes". In my lengthy experience as a public representative trying to assist constituents who have complaints to make about a service provider or a product, the default position seems to be that they assume they can make a complaint to the Central Bank. They are not generally aware that the Central Bank may not have a remit in relation to their case. The Central Bank is the regulatory body which deals with systemic issues in the financial services sector involving regulated bodies. More often than not, individual cases brought to our attention by constituents are more appropriately dealt with by the FSPO. When the Minister sums up at the end of the debate, he might let the House know what actions he has advised the FSPO to take. What actions does the FSPO plan to engage in to reach what we might describe as the harder to reach audiences? I refer to citizens who may have financial or digital literacy issues, who may not understand the products they may be having problems with, and who may need special assistance in having their complaints dealt with.

I would also like to ask about another recommendation made in the periodic review. In their consultations and engagements with the FSPO, have the Minister and the Department made progress on the introduction of an accessible online tracking system so that complainants can track the status of their complaints and see clearly what the next steps are? I raise this because of the direct experience of constituents of mine over the years and because of a story penned by Charlie Weston in the Irish Independent this week, which we read with concern. It was relayed by Deputy Doherty earlier on. The article articulates very clearly some concerns of financial advisers who are in the system now. They claim that the service has in effect “collapsed”, as stated in the article, which refers to intolerably long delays in having some complaints adjudicated on. It seems from the FSPO and from Charlie Weston's story that the average timeframe for referral of a complaint to adjudication and assignment to an adjudication officer is 12 to 15 months. Once a complaint file is assigned, it takes a further 12 to 18 months for a preliminary decision to issue. The Minister of State will agree that this kind of timeframe is unacceptable. It is important to note that the average length of time for a complaint to be resolved with the FSPO is ten months, with more than 80% being closed within 12 months. That is, of course, a good thing.

There has to be confidence in the FSPO and the efficacy of the complaints process if it is to be used effectively and if it is to reach those who need it most. Issues like this arise when there are resource problems. I would appreciate it if the Minister of State would put on record the total staff complement at the office, which I believe may be approximately 80 or slightly more. How does he envisages that this will increase? Does the Department have an agreement or understanding with the office on improving outcomes for complainants on timelines for the conclusion and resolution of processes? If additional resources are being provided to the FSPO, I imagine and hope that a condition of those resources would be an agreement - a quid pro quo - on timelines for the conclusion and resolution of processes and improvements in that regard.

Clearly, organisational capacity is a factor and needs to be addressed. Public confidence in organisations like this is a fragile thing and needs to be minded. A fit-for-purpose avenue of redress that is free of charge, has public trust and does not involve the courts is crucial to a functioning and fair financial services system. I think we will all agree that a feature of that system is a vast inequality of arms between the customer and the industry. There is a massive imbalance of power. Our society is replete with examples of banks and other financial services institutions using untrammelled power in the past - indeed, some are using it still - to wreak havoc and destroy lives. We need to value independent and impartial bodies like the FSPO and make the necessary investments and adjustments to the legislative provisions governing them. That is what we are doing here today. It is actually a democratic imperative to do so. We support the principles of this Bill and what it is seeking to achieve.

Deputy Peter Fitzpatrick

I welcome the opportunity to speak on Second Stage of the Financial Services and Pensions Ombudsman (Amendment) Bill 2023 and will support its progress today. The Bill states that the FSPO has the statutory power to investigate complaints against a financial services provider that was regulated at the time of the conduct complained of, even if the provider lost its regulated status before the complaint was made to the FSPO. The amendments also give the FSPO the power to decide whether to hold any oral hearings required during an investigation in public or in private. Another section of the Bill is aimed at ensuring that all mediation conducted by the FSPO is carried out in private. These targeted amendments will better equip the FSPO to withstand any potential challenge to its operations, and will provide improved legal clarity to reinforce the statutory basis of the FSPO. This is a key element of the consumer protection framework in Ireland. The proposed changes will safeguard consumer protections and access to the FSPO for customers of financial services providers who have left the Irish market.

The Financial Services and Pensions Ombudsman, Mr. Liam Sloyan, has reported that his office received 4,781 complaints in 2022. Despite the planned exits of Ulster Bank and KBC Bank Ireland, the office received fewer than 100 complaints identified as relating to market exit last year. Mr. Sloyan has expressed concern that the highest increase of complaints related to customer service at banks and other financial services firms, rising from 23% in 2021 to 28% in 2022. Customer service issues can include a provider’s failure to provide information, complaint handling issues, and accessibility and communication issues. Many of the consumers making complaints to the FSPO could have had their complaints addressed by their provider at an earlier point in time. This is especially the case with the rise in online payment firms.

The pre-existing decline in the use of cash was accelerated during the pandemic, which unfortunately resulted in the exclusion of people, especially older people, from functioning in society. Alongside this, the sharp rise of online payment firms and digital-only banks has brought consumers increased choice, like speedy technology and lower costs. Their advance has been accompanied by growing complaints, as users are hit by everyday mishaps and by financial fraudsters. Garda figures show a 560% jump in the number of bank accounts being taken over by fraudsters since the pandemic, with phishing frauds up 417% in the past three years. The fraudsters try to lure them into providing sensitive data such as banking and credit card details, and passwords. The number of fraudsters targeting older people means that such activity is rife. From eFlow toll scams to customs charges, everyone has got text messages to click on links and enter bank details. Often, people do not know better and their bank accounts are cleaned out by the criminals. These problems are exacerbated by patchy customer services and incomplete consumer protections covering companies licensed as so-called e-money providers, as opposed to banks.

On one of finance’s newest frontiers, fintech companies offer online-only services in everything from payments, currency conversion, lending, investment and crypto. Oftentimes, these payment firms sit outside Ireland’s financial services compensation scheme, so if they collapse, customers are not automatically rescued. For example, when a friend of mine first joined Revolut, their account details had a Lithuanian IBAN. However, once Revolut turned into a fully-fledged licensed bank, as it did in January 2023, it migrated accounts, replacing the Lithuanian IBAN with a brand new Irish IBAN. The benefit of this was that any complaints, after going through the internal process, could be taken to the FSPO in Ireland, rather than the Bank of Lithuania, in respect of services provided by the Irish branch.

The same person’s account was frozen and access to her balance was denied. She does not know if she breached any anti-money-laundering rules, under which banks can suspend accounts without giving reasons, and after many fruitless sessions with the Revolut messaging service, she still does not know why the online group froze her account.

Revolut communicates with its customers exclusively over a messenger function in its app, where customers are often passed around by operators who cannot give them answers about their missing or frozen moneys. This specific account was eventually unfrozen. However, if she was unhappy, she could have made a complaint to the Financial Services and Pensions Ombudsman. This shows that the problems that emerge in the early stages of a digital company’s life do not necessarily fade as the business grows, even when they turn into fully-fledged licensed banks. Hence the requirement of this new Bill and the powers of the ombudsman.

E-money firms’ clients can also fare worse if they are duped into sending money to scammers, a fast-growing crime known as authorised push payment fraud. Revolut in February warned customers to be alert to phishing scams after a surge in attacks and the Irish ombudsman is reportedly dealing with a jump in complaints. We need to do more to protect people from the possibility of financial harm from fraud and, hopefully, the implementation of the Bill will work towards that.

The Financial Services and Pensions Ombudsman also said that a quarter of complaints, or 24%, related to insurance – mostly claims handling, customer service and rejections of claims. Yet, while insurance complaints decreased 10% year-on-year, there was a 25% uptick in the number of pension complaints. Some 139 new tracker mortgage interest rate complaints were received in 2022, with the Financial Services and Pensions Ombudsman having over 1,000 tracker complaints on hand at the end of 2022.

The Financial Services and Pensions Ombudsman, Mr. Sloyan, acknowledges that the ombudsman has been receiving complaints relating to tracker mortgage interest rates since 2008. While the number of new tracker-related complaints is on a downward trajectory, it is notable that 139 new complaints of this nature were made to the Financial Services and Pensions Ombudsman in 2022. Just a few years ago, a bank was fined €21 million for harming over 2,000 tracker mortgage customers and breaching 42 Central Bank regulations, ranging from significant overcharging to the loss of 12 family homes. Even after the Central Bank tracker mortgage examination, there are still customers out there who are victims of the tracker mortgage scandals. Banks and insurance companies often drag their heels and fight cases instead of being proactive, identifying these customers and providing redress for the harm caused. This is where the Bill can make a difference.

The combined value of compensation directed in legally binding decisions, following either the Financial Services and Pensions Ombudsman’s dispute resolution service or its formal investigation process, was €616,686. In cases where early-stage mediation does not work, the case may be transferred to a formal investigation. The ombudsman can direct a provider to rectify the conduct that is the subject of the complaint and there is no limit to the value of the rectification that can be directed. The administration of justice is normally preserved for the courts system but the Supreme Court found in the Zalewski case that the administration of justice, as carried out by the WRC adjudication service, was permissible as the administration of justice was limited, leading to legislation that allowed the WRC to continue to exercise its functions.

Where the ombudsman determines that it is appropriate or desirable for a complaint investigation to include an oral hearing, the ombudsman shall decide whether to conduct any such oral hearing in public or in private, having consulted the parties and having considered the nature or circumstances of the complaint and whether it is in the interests of justice to do so. The proposed amendments, if accepted, would enable the Financial Services and Pensions Ombudsman to continue to carry out its statutory functions in line with the Constitution. With that in mind, this is an important Bill that, once enacted, will provide enhanced legal clarity for the statutory operation of the Financial Services and Pensions Ombudsman. It will also clarify that customers of financial service providers that have left the Irish market will continue to be able to access the existing services and consumer protections afforded by the Financial Services and Pensions Ombudsman.

With a history of financial scandals and the move to more digitalised banking and financial models, it is clear that the risk of fraud has also increased. These targeted amendments will better equip the Financial Services and Pensions Ombudsman to withstand any potential challenge to its operations, and the improved legal clarity will reinforce the statutory basis of the Financial Services and Pensions Ombudsman, a key element of the consumer protection framework in Ireland, safeguarding critical protections for consumers and small businesses going forward. For these reasons, I will back this Bill on Second Stage.

Deputy Carol Nolan

I welcome the opportunity to speak on the Bill, which is, at the very least, a step in the right direction in terms of redressing the power imbalance that has operated for decades in this State when it comes to consumer and financial institutions, be they banks, vulture funds or any other financial entity. In that sense, we can achieve the stated objectives of this Bill around strengthening protections within the framework of legislation that underpins the Financial Services and Pensions Ombudsman so it can continue to carry out its statutory functions in line with the Constitution. It will be a good day’s work if we can achieve all of that.

One of the issues that I would like clarity on relates to the operation and staffing of the Financial Services and Pensions Ombudsman. This is important because while we can have all the legislation we like, if the capacity of the FSPO remains limited or if it simply does not have the number of expert staff it requires to assist the consumer or small business, then, at best, the process will amount to a form of hypocrisy. We know, for example, that in providing a dispute resolution service to assist the resolution of complaints by mediation, the FSPO does so through the work of dispute resolution officers. I can only assume that the number of such officers is going to be significantly increased. If not, the introduction of these amendments today, at least in terms of protections, will not be worth the paper they are written on. There are already serious backlogs and time delays within the dispute resolution process. Is there any recruitment campaign to increase the number of staff? Perhaps the Minister of State can revert to me with a reply on that in due course.

I welcome section 14 of the Bill, which clarifies the respective remits of the Financial Services and Pensions Ombudsman and the credit reviewer. It is only right and proper that the ombudsman may accept a complaint where a financial service provider or pension provider has initiated legal proceedings in order to frustrate or delay its investigation. This is the kind of process that financial services providers can and often do engage in. They have massive resources and they can tie up an ordinary person or small business in expensive knots for years. We need to actively and robustly discourage that kind of approach. Again, as I have said from the outset, the Bill must redress the gross power imbalance that currently exists.

With regard to section 15, which deals with the requirement for financial service providers and pension providers to establish internal dispute resolution, IDR, procedures for dealing with complaints and to publish those procedures, I find it incredible that there is currently no statutory obligation for pension providers to have IDR processes in place or for them to be publicly available. This is also one of those mechanisms that keep ordinary people in the dark and effectively clueless about how to navigate the dispute process when they are engaging with financial services.

The main point I want to make is that we have lived for decades in a society where the might of banks, and now vulture funds, has effectively been allowed to operate with impunity against the interests of those in financial distress. In theory, we have any number of consumer protections, as well as the Central Bank and so on. However, in reality, it is those with the deepest pockets who usually triumph. The courts are full of people in distress who feel they have been abandoned by a regulatory process that they do not understand and cannot find justice within.

That has to change. The legal and legislative apparatus of the State have to be directed against any financial provider or pension provider that wants to burden ordinary taxpayers with a maze of complicated complaints resolution processes. If the Bill before us can assist with changing that situation for people who are in distress, it will be very welcome indeed. It will certainly have my support if it does that.

Deputy Robert Troy

I welcome the opportunity to contribute to this debate. Anything that gives consumers greater protection is to be welcomed. Unfortunately, we are all too well aware of situations where financial institutions have shattered the trust that has been placed in them and have exploited people's lack of financial expertise for their own material gain. Only in the last few days, we read a report by Charlie Weston in the Irish Independent about the Financial Services and Pensions Ombudsman. He claimed that it is on the verge of collapse and that it takes up to five years for consumers to have their complaints heard.

I deal, as I am sure other Members do, with constituents who have issues with financial institutions. We make representations on their behalf. We can see the anxiety, worry and fear they go through while waiting for their concerns or queries to be addressed. It is not good enough for somebody to go to the Financial Services and Pensions Ombudsman and be obliged to have to wait up to five years. Financial advisers are telling consumers that they would be better off going to court. The whole reason the Financial Services and Pensions Ombudsman was established was to provide a free complaint resolution service for consumers. This is a State body that is funded by means of levies imposed on financial service providers and a grant from the Government. Its findings are legally binding. If financial advisers are telling people to bypass this independent body and to go down the legal route, it is failing in its duty.

I met a financial adviser quite recently. He raised a number of concerns regarding the Financial Services and Pensions Ombudsman. He told me that he has lodged 120 mortgage and pension miss-selling complaints with the Financial Services and Pension Ombudsman. He commenced filing the complaints in December 2019. The first complaint, which relates to a tracker dispute, had not been processed as of the date on which he contacted me, which was only sent in the past couple of weeks. That is 1,460 days outstanding, but the European directive on the subject recommends a target of 90 days for effective judgment. This man is dealing with a complaint that has been ongoing for 1,460 days, but the European directive on the subject recommends a period of 90 days. That is a serious failing. Other Members have spoken about whether the office is adequately resourced and staffed.

I received a briefing paper, which I will share with the Minister of State after my contribution and which he may share with the Minister, Deputy Michael McGrath, from the financial adviser to whom I refer in which he sets out concerns regarding the process of justice that is available to Irish resident purchasers of financial products and services. The concerns are that the Financial Services and Pensions Ombudsman does not adhere to, or appear to be cognisant of, its obligations under the EU directive on alternative dispute entities. The Financial Services and Pensions Ombudsman does not appear to be cognisant of the unfair terms in consumer contracts directive. There is misreporting and misclassification to Europe of the rejected and refused complaints by the Financial Services and Pensions Ombudsman. There are breaches of the European principle of effectiveness. The document in question is quite comprehensive. I will not go into everything it states, but, as I said, I will share it with the Minister of State. I hope he will be able to bring it back to the Minister for Finance in order to ascertain whether the financial adviser who gave it to me is correct in what he says.

Is the Financial Services and Pensions Ombudsman failing in its duties to protect consumers? It is certainly failing to protect consumers in the timeline that has been set down by the EU. It would appear that it is rejecting outright certain cases without even giving due consideration to them.

One issue that has been raised with me is how the Financial Services and Pensions Ombudsman does not report the EU-required statistics on the average time taken to resolve disputes. Instead, it reports the number of complaints that have been closed. In 2022, 47% of complaints were rejected, refused or deemed ineligible by customer operations and information management team. These are complaints that do not reach investigation or mediation. The Financial Services and Pensions Ombudsman does not report these complaints as rejected or refused in the European records. It is saying that the complaints have been closed. What exactly does that mean? Some 47% - almost half - of the complaints that went to the Financial Services and Pensions Ombudsman in 2022 were closed. Yet, it is still taking 1,500 days to investigate cases that should be dealt with in a period of 90 days. That is definitely not good enough.

Another issue in relation to the European Union's principle of effectiveness is that people should not have to go to the courts in order to be exonerated or have a complaint upheld. In this scenario, however, the only option following a determination by the Financial Services and Pensions Ombudsman is to take a consumer to the High Court. The costs of this process are totally disproportionate to the claims that are involved. It is not really an option for many people to take a case to the High Court. It is against the principle of effectiveness.

I am also told that the Financial Services and Pensions Ombudsman routinely indicates in the letters it issues to consumers that if they are not happy with a decision, they can take the matter to the High Court but that if they do so, they should be aware that it may seek legal costs in respect of any failed claim in the High Court. It is therefore telling them to go to the courts but that if they fail, it will come after them for the costs. This office is meant to be in place to exonerate the ordinary citizen and the consumer who has been blackguarded by a bank, financial institution or the insurance companies. Some of the mechanisms it is using are heavy-handed.

Deputy Alan Farrell

I welcome the opportunity to contribute to the debate on this Bill which, as has been repeatedly mentioned, will provide better protection for consumers and existing consumers of financial service providers that have left the market. As the Minister outlined, it will ensure that consumers in the latter group will continue to have access to services provided by the office of the Financial Services and Pensions Ombudsman. This is a just and appropriate response, because the effects of the uncertainty consumers face in such circumstances can impact their health and well-being. Financial stress and worry can diminish a person’s quality of life on a day-to-day basis, as we all know in this House, having gone through the last decade in particular. I am pleased that the Government is taking action to limit these circumstances by means of Bills such as this. There are, however, many other matters that I will raise towards the end of my contribution on which I believe we are very slow to act. We should take steps to resolve those.

Access to consumer protections and support through the Financial Services and Pensions Ombudsman can be pivotal in bringing resolutions to complaints and provides much-needed clarity for individuals.

I would also like to underscore that if such people do require assistance from the ombudsman, there is no charge in relation to filing a complaint, which is unfortunately something that needs to be mentioned.

On the wider issue of pensions, we must address some key areas that will benefit the population in years to come, making it easier for people to retire in the knowledge that their money is safe and has been set aside. The introduction of pension auto-enrolment, which I understand should be in place later this year, will be a game changer with regard to how we approach retirement in Ireland. The implementation of this scheme will, in years to come, be seen as a hugely significant step taken by this Government. Indeed, it is the largest change to the pensions system in the history of our State.

Research carried out last year showed that 46% of people do not feel that they understand pensions and 39% were unaware of the tax advantages of having a pension. Moreover, 74% put day-to-day spending ahead of saving and of pension holders, 62% felt they were not saving enough. These figures underscore the importance of policies such as pension auto-enrolment, but they also speak to a wider issue of what could be termed as pension illiteracy. If people do not understand a system or an incentive, it naturally follows that they will not engage with it, even when in their own interest. We see this in many aspects of life and the same is true with regard to pensions.

The introduction of auto-enrolment provides a golden opportunity to provide better information leading to a better understanding of, and better engagement with, pension services. Given good information, people will make good decisions. These changes will benefit individuals and the whole of society. Just as we must provide individuals with good information and guidance, we must also provide support for businesses regarding the implementation of auto-enrolment and allay their concerns over the cost of implementation. Those concerns have been raised many times in this House and I know that the Minister for Social Protection, Deputy Humphreys, is working to address them. In particular, I commend the decision to establish a central processing authority which will carry the majority of the administrative burden of the system, thus alleviating pressure on businesses to undertake this step on their own. Of course, in and of itself, that provides an additional layer of consumer protection.

In the years to come this will play an ever more important role in our society. We are seeing a shift in our population demographics, with people having fewer children and living longer, resulting in an aging population. We are also more mobile as a species and this is a good reason to provide more protection for pensioners as they move around and indeed, as financial companies move around. As these population shifts continue, there will be more pressure to meet budgetary demands for pensions and this underscores the importance of auto-enrolment. It will enable us to avoid the pitfalls that the future could hold if it were not implemented.

It is imperative that as people retire, they can do so safe in the knowledge that there will be money there for them when they decide to take that step and that the necessary protections are in place to ensure they are treated fairly. It is important, where disputes arise or financial service providers enter or exit the Irish market, that we have the framework to provide adequate consumer protection measures which, when called upon, aid individuals in a timely and efficient manner. This Bill, at its core, is about consumer protection under a specific set of circumstances. As I alluded to earlier, however, there are other sets of circumstances where consumers are bring ripped off, frankly. I refer to simple things like the fact that under most pension schemes, if a pensioner dies, the person who inherits his or her estate does not necessarily get 100% of the pension. Of course, if it is a State-backed scheme, that is a slightly different matter, but I am talking about people's own money. Why is it that a private pension company gets to trouser money belonging to somebody else? As I said, unless an individual is actually specified, if he or she is not in receipt of an award, he or she will not necessarily get the full amount but might only a percentage of that amount. Likewise, when individuals who make significant contributions to pension schemes over long periods of time do not survive to see the entire benefit of that pension, often those inheriting may or may not receive the entirety of what is left. I understand that there are costs involved but we all know that the banks and financial institutions are making millions upon millions of euro with our money.

A great case in point relates to mortgages which are, when one assesses them, laughable as a financial product, primarily because the consumer is the very last person on the list to benefit. The mortgage holder is contributing so much, often hundreds of thousands of euro for a mortgage of hundreds of thousands over the course of a lifetime, plus interest and associated fees. Again, this is not really a system that was established with the consumer in mind. It was established with the banks in mind and hundreds of years, sadly, of financial rules and laws from multiple first world countries have seen that system perpetuated.

My final point on pensions is something that really troubles me and has done so for many years. I refer to taxation. Why are pensioners being double taxed? Why is it still permitted in 2024 for pensioners to be double taxed? They are taxed on the income that goes towards their pension and then they are taxed on the way out again, with all of the aforementioned pitfalls in terms of them passing on the pension pot that might still be there, which is their money. It is not the pension company's money; it is the pensioner's money. The pension company will get its profit, rest assured. Those are my final remarks on the matter. I appreciate these matters relate to an entirely separate Bill but in terms of policy, I would like to see them addressed.

An Ceann Comhairle

Thank you, Deputy. I suspect it was good to get that off your chest.

Deputy Alan Farrell

I feel much better now, a Cheann Comhairle.

Minister of State at the Department of Foreign Affairs (Deputy Sean Fleming)

I welcome the opportunity to respond. I thank Deputies for their contributions to the debate and their constructive engagement on this legislation. First, I acknowledge the final point made by Deputy Alan Farrell in respect of what many would see as double taxation. People are taxed on the income that helped to contribute to their pension and then they are taxed again when they receive the pension. I will ask the Minister to clarify that matter on Report Stage and to provide a comprehensive note on it. There is a widespread view that there is an inherent unfairness in the system in that regard and it is important the situation is corrected.

There will be a detailed debate on Committee Stage in relation to this legislation. The Bill will be examined by the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach in the coming weeks. The Minister for Finance, Deputy Michael McGrath, looks forward to a more detailed consideration of the provisions of the Bill and will engage with Deputies on any proposed amendments. In the meantime, officials in the Department of Finance will reflect on the points raised today and will give them further consideration in consultation with the Financial Services and Pensions Ombudsman and the office of the Attorney General, where appropriate.

In the context of the points made today, Deputy Troy said he is in possession of an extensive document. I ask him to pass it on to me in order that I can give it to the Minister directly or pass it on to his office. In this way, he will be made aware of the contents of the paper to which the Deputy referred.

This Bill is important to ensure that the office of the Financial Services and Pensions Ombudsman can continue to carry out its statutory functions in line with the Constitution. It will significantly improve the consumer protection framework in Ireland. The importance of the role of the Financial Services and Pensions Ombudsman for consumers of financial services in Ireland is highlighted by the fact that, as the ombudsman's annual report indicates, more than 6,000 complaints were received in 2023, with more than 5,000 complaints closed in that period. The number of complaints the ombudsman's office receives each year continues to grow. There was, for example, a 30% increase in the number of complaints received in 2023 compared to 2022. The Financial Services and Pensions Ombudsman also reports an increase in more complex cases which can take longer to resolve.

Reference was made to delays, which is why the Minister will be providing for additional staff. I will deal with that matter later. It is possible that there are particular reasons for delays in some cases. For example, a complainant may be impacted by the outcome of an ongoing statutory appeal or judicial review related to a similar matter. It could also be the case that no action is appropriate, pending the outcome of an independent tracker mortgage examination appeal panel process. If the outcome of external legal proceedings is awaited, that can also delay the process of dealing with complaints. Sometimes a hold on a decision could be at the complainant's request for personal reasons. There can be a delay at the complainant's end. The final point in this regard is that the volume of ongoing submissions from the parties addressing the evidence under consideration during the complaint investigation can add to the processing times.

These can all add time, but that is not to suggest that there are not some delays. That has been well highlighted in the context of the Financial Services and Pensions Ombudsman's office. That is why the Minister for Finance was pleased to sanction the Financial Services and Pensions Ombudsman workforce plan for 2024 to 2026 recently which increased the sanctioned number of staff from 90.2 whole-time equivalents to 128, an increase of 42% in staffing. This includes increasing the investigation service team from 17.6 whole time equivalents to 36 reflecting the current gap in capacity, which is acknowledged by the Financial Services and Pensions Ombudsman and the Minister, and the increasing demand on services. That is why he has approved that workforce plan to provide additional staff.

Other key roles include the additional deputy ombudsmen and ICT chief information officer at principal officer level and other roles in areas such as legal services, registration and assessment, dispute resolution services, finance, HR and consumer services. The implementation of this workforce plan will increase the office's resources and the capacity of the financial services ombudsman's office to resolve cases more promptly.

The Financial Services and Pensions Ombudsman (Amendment) Bill 2023 will update the principal Act of 2017 and take account of the ruling in the Zalewski case by making targeted amendments: to provide that the ombudsman is required to take a decision on whether to hold oral in hearings in public; to clarify the process for oath taking and affirmations in oral hearings; and to provide that mediation shall be conducted in private. This is complemented by a number of improvements to the wider Act through various other amendments. These measures will strengthen the functions and robustness of the office of the ombudsman to improve the consumer protection framework for customers of financial services and pension providers, an aim that I am sure everybody in this House will share.

The Minister looks forward to further debate on the Bill as it progresses through the House.

Question put and agreed to.