AgeActionIreland

Name and shame financial institutions which mis-sell to older customers

The Financial Regulator must name and shame financial institutions which have been found to breach the Consumer Protection Code by attempting to mis-sell products to older customers.

Age Action warmly welcomes the publication by the Financial Regulator yesterday of findings of its year-long examination of selected financial institutions and the suitability of investment products sold to older consumers.

“The use of independent third party ‘mystery shoppers’ to examine sales practices is very welcome and long overdue,” Age Action spokesman Eamon Timmins said. “The fact that four institutions they visited attempted to sell products which locked people’s investments away for up to six years is a cause of concern, considering that the mystery shoppers were aged between 72 and 79.”

Age Action is also concerned that the examination revealed a range of breaches of the Consumer Protection Code among the credit institutions, life insurance firms and investment and stockbroking firms visited.

These include a lack of evidence that they gathered sufficient information from clients to advise them correctly or select a suitable product to them. Some did not advise older customers of the option of having a third party present at sales meetings, while others did not give customers any advice on the level of emergency funds they should maintain. The Consumer Protection Code requires that a statement of suitability be provided setting out the reasons why a product or service being offered was suitable for that consumer. However, some statements reviewed during inspections were generic in nature.

Since its establishment in 2005, the Financial Ombudsman’s Office has repeatedly highlighted cases of financial mis-selling to older customers, and made awards in favour of older people to compensate them. Despite repeated warnings, the Financial Regulator’s report shows continuing failure by institutes to adhere to the Consumer Protection Code.

“Age Action believes that financial institutions which are found to have breached their regulatory requirements should be named so that older people will know which firms take their responsibilities seriously,” Mr Timmins said. “Publication of such breaches may more effective than fines or sanctions.”

FOR MEDIA QUERIES CONTACT EAMON TIMMINS, HEAD OF ADVOCACY AND COMMUNICATIONS, AGE ACTION. 01-4756989 OR 087-9682449

To read the statement issued by the Financial Regulator’s office see http://snipr.com/ua1jm