Where to go when your Investment Collapses because of Poor Advice
The Financial World has changed in the last two and a half years. A lot of vulnerable people were negligently advised to invest their “Nest Egg” into products which were clearly unsuitable for them, by Banks, Insurance Companies, Brokers, and Other Advisers.
A lot of people are totally unaware of the type of redress that is available to them, if it can be established that the advice given to them was Inappropriate, Negligent, or, where the Investment was put in the wrong place, as has happened on a number of cases.
The first stage in investigating whether, or, not the Bank or Building Society, or, Insurance Company, or, Investment Broker has a case to answer is by taking up a complete copy of your own file. It is often the case that clients do not have all the documentation. This can easily be rectified by making a written request for your file. Each Institution is obliged to furnish you with a copy of your file upon demand.
Upon reading the file, it is then clear as to what type of product was involved, and, whether, or, not the Investment Broker has complied with the law in relation to Risk Assessment, and, Selection of Product given the client’s circumstances.
There have been many cases against Banks and Building Societies for Inappropriate Advice, and, Negligence. There have also been many cases against Stockbrokers, Investment Brokers, and Financial Advisers.
A person who is upset at the loss of their Investment, and, believes that it was due to Poor Advice, or, Poor Placement, can either, bring an Action before the Courts, seeking Damages for Negligence, or, can bring a complaint to the Financial Services Ombudsman.
The Financial Services Ombudsman was established under the Central Bank and Financial Services Authority of Ireland Act, 2004, and, has been up and running since the 1st of April, 2005.
In 2009, complaints increased by over 20%, from 2008, and, came in at a whopping 7,619 complaints. Complaints in 2010 are slightly down so far this year.
Complaints against Insurance Companies increased by 40% in 2009. The majority of these related to Investments, which rose by over 100% from 621 in 2008 to 1,309 in 2009.
The amount of complaints in relation to Payment Protection Policies, and, Mortgage Protection Policies doubled in 2009.
At the start of 2010 the Ombudsman was dealing with 3,400 current complaints. It takes on average 9.5 months to make a finding from the date the complaint is received.
The Ombudsman’s office can make a finding on what the Ombudsman believes is fair, and, reasonable in the particular circumstances of a case. It is not a Court as such. The Ombudsman seeks to resolve issues affecting consumers. The Ombudsman does not get involved in technicality, or, legal form. The Ombudsman in effect, checks whether the conduct which is complained of is reasonable, or, not.
The Ombudsman’s Office is in a position to resolve a complaint in a time frame which is probably far more satisfactory than the Court System. It can take many years for a case to come into the High Court with respect to any investment over €38,000.
The Courts have supported the Ombudsman’s existence, and, function. The Ombudsman is neutral, and, therefore does not hold a candle for any Financial Institution, or Insurance Company. The Ombudsman is in its own words a “Fair Adjudicator”.
The Financial Crisis has placed all Financial Institutions, Advisers, and Investment Brokers under increased scrutiny. A lot of changes are being made to the way that Investments are being handled by reason of Decisions of the Courts, and, also by reason of findings of the Ombudsman’s Office.
Any complaint by a consumer can be brought to the Ombudsman’s Office provided that the product concerned does not have a value of more than €3 million. The conduct that is being complained of must have occurred within the previous 6 years. One cannot issue proceedings in the Courts and complain to the Ombudsman at the same time. One must choose one or the other.
The process itself is very simple. A Complaint Form is completed. The Ombudsman then sends that to the Institution concerned, and, a response letter must then be furnished within 25 working days.
The Ombudsman will offer Mediation, and, if that is unsuccessful, or, refused, the Ombudsman will then proceed to formally investigate the complaint.
If a complaint is upheld, then the Ombudsman can issue an Award which can include a refund of the total amount invested, or, Compensation up to a total of €250,000.
The Ombudsman’s Office Decisions can be appealed to the High Court, and, are commonly appealed by the Financial Institutions concerned.
If you feel that you have made an investment with the assistance of a Bank or, Building Society, or, Investment Broker, and, the advice was deficient, and, you have incurred a loss, then it is advisable for you to investigate the matter. You may find that the loss that you have incurred is attributable to Negligence on the part of the Financial Adviser. That Negligence is often times actionable before the Courts, or, something that can be pursued before the Ombudsman.
Patrick Mullins,
Partner.
MLB Solicitors.
Melbourne House,
Model Farm Road
Cork
Website: www.mlb.ie
