FSPO publishes volume 5 of Digest of Decisions

On 3 February 2021, the Financial Services and Pensions Ombudsman (FSPO) published volume 5 of his Digest of Legally Binding Decisions (Digest). Of the 20 decisions included in the Digest, 14 were upheld, at least substantially or partially, and 6 were not upheld. In this article, we examine recent trends in complaints to the FSPO by reference to the decisions in the Digest and some other recent developments.

1. Breakdown of the decisions in the Digest

In short, the 20 decisions can be summarised as follows:

• 9 financial services related decisions, of which 6 were at least partially upheld.
• 4 out of the 9 financial services related decisions concerned complaints regarding tracker mortgages. Of these 4 tracker mortgage related complaints, 3 were at least partially upheld. These 4 decisions are examined in further detail below.
• 6 insurance related decisions. 2 of these were not upheld and the remaining 4 were either substantially or partially upheld.
• 3 investment related decisions. 1 was not upheld, 1 was substantially upheld, and 1 was upheld in its entirety.
• 2 pension related decisions. 1 of these was not upheld and 1 was partially upheld.

2. Decision relating to an insurance policy appealed to High Court

An FSPO decision concerning a complaint regarding an insurance policy, which provided cover against structural defects in a property, has been appealed to the High Court by the insurance company. As with all FSPO decisions appealed to the High Court, the final decision will not be published by the FSPO pending the outcome of the High Court appeal process.

3. COVID-19 and the FSPO

The Digest provides some insight into the impact that Covid-19 has had on the operation of the FSPO. The FSPO’s foreword contained in the Digest states that the FSPO office has “succeeded in meeting our 2020 targets for the closure of complaints”, apparently due to a range of measures implemented to ensure continuity of service. This will be welcome news for providers and complainants alike, as the relative efficiency of resolving claims before the FSPO compared to the courts, does not appear to have been unduly impacted by Covid-19.

According to its website, the FSPO office’s operations continue to be delivered by staff working remotely. The FSPO currently communicates with complainants and providers by email, and sometimes by telephone as appropriate. Formal documentation, including both the FSPO’s preliminary decisions and legally binding decisions, are issued to parties by way of email where possible. On a temporary basis, the FSPO is accepting pdf submissions from complainants and providers, provided that the relevant complainant has confirmed an email address for communication.

In the Digest, the FSPO has confirmed that specific decisions arising out of Covid-19 related complaints will be published in the first half of 2021.

4. The FSPO’s general comments on tracker mortgage complaints

In his commentary, the FSPO noted that tracker mortgage complaints continue to comprise a considerable amount of the work carried out by the FSPO office. The FSPO also noted a recurring theme in the digests of decisions published to date, namely that a significant number of tracker mortgage complaints continue not to be upheld.

The main reasons for this trend include “unrealistic expectations” and a “lack of understanding” by complainants of the need for a contractual or other entitlement to a tracker interest rate. The FSPO commented that some complainants appear to believe “that their desire to have a tracker interest rate provides a basis for requiring their bank to grant them one”.

The FSPO also drew attention to one unnamed bank, who had maintained an argument that certain customers were not entitled to a tracker mortgage, despite having conceded the opposite during the Tracker Mortgage Examination led by the Central Bank of Ireland (TME). This line of argument arose in the context of complaints relating to the amount of compensation offered…