Case Studies

2011

Disability Payment under an Income Protection policy Complaint Upheld

The Complainant was in receipt of Disability Benefit from the Company. The Complainant received a compensatory amount from the Employment Appeals Tribunal (EAT). The Company decreased the monthly benefit payable to the Complainant in accordance with the terms of the policy.

The relevant Clause sought to reduce the benefit payable to the policyholder by deduction inter-alia of "payments one of which is the annual equivalent of any award made to the insured person by Court of Law or Arbitration Tribunal or Settlement lump sum or ex gratia payment received by the Insured Person in respect of loss of earnings from any action relating to Disability"

The issue to be determined in this instance was whether the award made by the EAT in favour of the Complainant was "an award made ... by [an] Arbitration Tribunal ... in respect of loss of earnings from any action relating to Disability". The case taken by the Complainant against her employer to the EAT was one of constructive dismissal. The Complainant contended that the award was not relating to disability and therefore that the Company has been incorrect in reducing her disability payment under the Policy.

The Ombudsman considered both the Terms of the policy and the provisions of the Unfair Dismissals Act 1977. The Ombudsman was satisfied that the Determination of the Tribunal was based on the circumstances which led to the Complainant being forced to leave her employment, namely the "abandonment of fair procedures" and was not based on any consideration of the Complainant's disability or otherwise.

The Ombudsman accordingly decided that there had been no evidence adduced which would substantiate the contention that the award made by the EAT was in any way related to disability as is required under the policy in order to reduce a disability benefit being paid to a policyholder.

The Ombudsman found that the payment made by the EAT to the Complainant could not be equated with:"... any award made to the Insured Person by a Court of Law or Arbitration Tribunal or settlement lump sum or ex-gratia payment received by the Insured person in respect of loss of earnings from any action relating to Disability" and therefore the Company could not use this award to reduce the Disability Benefit payable to the Complainant.

Critical illness claimComplaint Not Upheld

The Complainant in this case had been diagnosed with a large tumour and underwent surgery. The complaint related to the Provider's decision to decline the Complainant's subsequent critical illness claim on the grounds that the tumour was benign and not cancerous, and therefore not covered by the terms of his policy. Instead, the Provider made a 10% payout on the basis that the Complainant's claim met the definition for surgical procedure to the spinal cord.

The Complainant disputed the Provider's assessment of her claim. She argued that her tumour might not have been cancerous but that it was serious and life threatening, and had prevented her from working for a period of six months.

The Ombudsman examined the terms and conditions of the Complainant's policy and was satisfied that these terms and conditions clearly set out the benefits in detail. The Complainant's claim fell to be assessed under a clause which stated that Benefit "consists of the payment of a lump sum to you if an insured life is diagnosed as having one of the specified medical conditions or undergoes one of the specified operations as listed ....".

It was noted that Cancer was included in the list of medical conditions covered and that the term "cancer" was defined at (iii) as follows:

Cancer, being a malignant tumour characterised by the uncontrolled growth and spread of malignant cells and the invasion of tissue. This includes leukaemia and Hodgkin's disease but excludes non-invasive cancers in situ, tumours on the presence of HIV or skin cancer other than malignant melanoma.

The Ombudsman studied the medical evidence submitted by both parties to the complaint and found that it was not disputed that the tumour which had been removed from the Complainant's spine was benign, ie. not malignant.

He noted that the Provider was obliged to make payment of benefit to an insured under the policy only in accordance with the terms and conditions of the policy. In the circumstances of this case, based on the medical evidence submitted, the Complainant's tumour did not meet the definition of cancer specified by the Complainant's policy and accordingly the Provider was not obliged to make payment to the Complainant of the full amount of Benefit.

The Ombudsman noted that the Provider had correctly made payment of a sum representing 10% of the Living Cover Benefit on the basis that the Complainant underwent a surgical procedure to her spinal cord, in accordance with the relevant sections.

Critical illness Claims handling issues Complaint Upheld

The Complainant, who held an Accident Disability policy with the Company, was involved in a farm accident on 25th October 2009 were he broke a femur. The Complainant was hospitalised for 24 days.

The Complainant submitted a claim to the Company, who paid some €2,000 on 1st February 2010. This payment represented 57 days' benefit, up to 22nd December 2009. The Complainant stated that the Company included a letter that indicated the payment was an interim payment, and a continuing claim form was included.


The Complainant completed the continuing claim form and returned it to the Company, who acknowledged receipt on 27th March 2010. The Company then wrote to the Complainant on 8th April 2010 stating that any further claim would be declined as maximum benefit had been paid.


The Complainant appealed the decision, submitting a note from his GP showing that he was still disabled and using crutches. The Complainant stated that his Summary of Benefits showed that he should be covered for 6 months at full benefit and 1 month at half benefit.


The Company acknowledged that it had initially delayed in examining the claim and offered €100 to the Complainant as a gesture of goodwill. The Company affirmed its decision not to continue the claim in its final response letter.


However, in responding to this Office, the Company indicated that it should have sought clarity from the Complainant's medical representatives rather than asking the Complainant to prove his further disability. The Company identified that further benefit of €4,664.40 should in fact be paid to the Complainant, and it offered the additional benefit of €4,664.40 plus €500 goodwill. The Company stated that this payment would be made to the Complainant within 14 days.


In the course of the adjudication of the complaint, it became clear that the Company had not made this payment to the Complainant. It was now 18 months since the claim had been originally made to the Company. The complaint was upheld that the Company had been incorrect to refuse to pay further benefit.


The Company were directed to pay the remaining benefit of €4,664.40 to the Complainant plus an ex-gratia payment of €1,000 to conclude.

Refusal to provide any policy Complaint Not Upheld

The complaint in this case was that the Company unfairly refused to provide a policy of Income Protection Cover to the Complainant.


At application stage the Company conducted a tele-interview with the Complainant wherein he disclosed his medical history to the Company in compliance with the requirements for an application of this nature. The Company further sought medical details from the Complainant's GP. On foot of all the information available, the Company in consultation with the Chief Medical Officer declined to offer cover and confirmed the position to the Complainant.

While the Complainant pointed to one aspect of his health as preventing the Company from offering cover, the Ombudsman was satisfied that this Illness was not the only aspect of his health which caused the Company to decline to accept the application. In its letter of declinature of cover the Company had provided the Complainant's GP with confirmation of this position.


On the evidence submitted, the Ombudsman found that the Company processed and assessed the Complainant's Application in a fair and reasonable manner. The Complainant made a full disclosure of his medical history and having regard to that information the Company had explored all avenues with regard to providing cover - including seeking an opinion from a Reinsurer in respect of the application. Having regard to all the medical conditions disclosed by the Complainant the Ombudsman was satisfied that it was not possible for the Company to offer cover. However, the Company did agree to review the matter in 5 years' time.


Underwriting and rating matters are, in general, matters which are at the commercial discretion of the Company. Underwriting and rating matters concern the decision by an insurance company as to whether a proposal for insurance should be accepted, and, in that event, the amount of premium and the terms and conditions that are to apply.

As there was no evidence of any wrongdoing by the Company relative to the underwriting process, the Complaint was not upheld.

Income Continuance Complaint Not Upheld

The complaint in this case related to a claim under an Income Continuance Plan. The complaint was that the Company incorrectly assessed the claim and was wrongfully withholding payment of benefit under the policy.

The issue for investigation and adjudication was whether the Complainant satisfied the policy criteria for payment of benefit for the period commencing at the end of the relevant deferred period under the policy, up to the date the Complainant returned to work. The Policy had the following definition of Period of Disability: "A period throughout which a Member is totally unable to carry out his Normal Occupation due to a recognised illness or accident".

To meet the criteria of this definition the Complainant needed to be totally unable by reason of a recognised sickness or accident to perform the functions of her own occupation.

The Ombudsman reviewed the medical reports from the Employer's Medical Officer, the Complainant's GP and an Occupational Physician whom the Complainant attended at the Company's request as part of the assessment of the claim.

The Company received two reports from the Employer's Medical Officer. The first report outlined that a number of medical conditions were preventing the Complainant from returning to work and it was anticipated that the Complainant would be fit to do so in a further 4 weeks. The second report indicated a medical condition preventing a return to work and that the Complainant's GP felt the Complainant was not in a position for full time work but did suggest the Complainant was fit for a 4 day week. Following the review with the Company appointed Occupational Physician it was indicated that the Complainant was reasonably independent in her daily life with few limitations. A minor aliment was noted, but the Complainant was otherwise healthy. The Occupational Physician was of the opinion that the Complainant had a number of symptoms which did not represent any sinister underlying disorder. The Occupational Physician was of the opinion that the Complainant's medical complaints did not render her disabled or unfit for work and the decision to work a 4 day week was not required on medical grounds.

After carefully considering the evidence, it was the Ombudsman's Finding that the complaint was not upheld as the weight of the evidence did not support the Complainant's assertion that she was totally unable to carry out her normal occupation.

Insurance on a Holiday Home Complaint Not Upheld

The Complainant had a holiday home insured with the Company. The policy was effective from April 2009 to April 2010. The insured property suffered water damage due to a burst pipe in November 2009. The Complainant submitted a claim in respect of the damage caused to the property by the escape of water. The Company declined the claim on the basis that the policy conditions were not met, namely that the Complainant had not complied with the following policy provision:

"HOLIDAY HOME UNOCCUPANCY ENODRSEMENT (used by You only)

Where the Home is used as a holiday home used by You only

(1)We will not cover loss or damage arising from freezing escape or overflow of water from within any plumbing or heating system, fixed water apparatus or fixed domestic appliance during the period 1. November to 31st March annually unless:

(i) the water supply is turned off at the mains and all water is drained from the system or

(ii) the central heating system is left in full operation 24 hours a day to maintain a minimum temperature of 10C/50F throughout the home."

The Ombudsman found the claim submitted by the Complainant fell to be assessed under the terms, conditions, exclusions and endorsements of the policy contracted into by both parties. The Ombudsman was satisfied that the Complainant had not complied with the relevant policy provisions i.e. the water supply had not been turned off and drained from the system, or the central heating system had not been left in full operation 24 hours a day at a minimum temperature. Consequently the complaint was not upheld as the Company had acted correctly in declining the claim.

Tracker Mortgage Complaint Upheld

The Complainant had a mortgage with the Bank, drawn down at a ‘tracker' interest rate in 2006. In mid 2007 he decided to fix the interest rate for 3 years. When the fixed interest rate period expired, the mortgage was put on the Bank's standard variable interest rate, not the ‘tracker' rate.

The Complainant brought a complaint to the FSO, stating that he should have been allowed to go back to the original ‘tracker' rate when the fixed rate expired.

He argued that when he signed up for the fixed rate he was not told he would not have the ‘tracker' rate option when the fixed rate expired; he was only told about this as the fixed rate period neared completion.

He stated that documentation used when he signed up to the fixed rate referred the Bank's home loan rate applying at expiry of the fixed rate and he presumed this meant the home loan ‘tracker' rate for which he had first signed up in 2006. He argued that the documentation never referred to a standard variable rate.

He submitted that the Bank, in response to the complaint, argued that the home loan rate meant standard variable rate. In that regard, he stated that the mortgage terms and conditions and the document signed when fixing the rate never mentioned this point.

The Complainant requested that he be allowed go back to the ‘tracker' rate as originally detailed in the mortgage.

The Bank stated that it had administered the account and interest rate in accordance with the documentation and that the documentation was clear and concise as to what would happen at expiry of the fixed rate period.

It argued that the document signed when the Complainant fixed the interest rate referred to the home loan rate at expiry of the fixed rate period. It argued that its home loan rate is also known as its standard variable rate.

It submitted that by signing the documentation when he fixed the interest rate, the Complainant had consented to fixing the rate subject to the conditions in the documentation and confirmed that he clearly understood the process when the fixed rate period expired.

The FSO looked at all evidence and submissions, with particular regard to the documentation. This included the mortgage terms and conditions, signed in 2006, and the document signed by the Complainant when he decided to fix the interest rate in 2007. It was noted that the 2007 document referred to the wording of the mortgage terms and conditions, i.e. the documentation of 2006.

The FSO asked the Bank if it considered that sufficient information had been provided to allow the Complainant make an informed decision as to the mortgage and interest rates which would apply following expiry of the fixed rate period.

Having considered the documentation, and the submissions of the Bank and the Complainant, the FSO expressed concerns with the terms used to describe interest rates contained in the documentation. The FSO stated that there was a lack of clarity and consistency as to what type of interest rate certain terms referred to and that confusion could have arisen regarding this wording. Reference was made to the wording of the general conditions of the mortgage and the wording of the document signed by the Complainant when he fixed the interest rate.

The FSO stated that there is a duty on the Bank to provide clear and straightforward information. Ultimately, the Bank produced documentation on which it sought to rely and on which the Complainant reasonably relied when making his decision to fix the rate. An issue as to the clarity of that documentation arose.

It was concluded that the Complainant had substantiated his complaint. The Bank was directed to allow the Complainant opt for the ‘tracker' rate and to backdate this to the expiry of the fixed interest rate period.

Tracker Mortgage Complaint Upheld

The Complainants took out a mortgage with the Bank in October 2006. In October 2007 the Complainants decided to reduce the period of their mortgage and fix the interest rate for a period of 3 years on a portion of their mortgage.

Towards the end of their fixed interest rate period, the Complainants approached their branch of the Bank to enquire as to what options were open to them at the end of their fixed interest rate period.

The Bank informed the Complainants that three options were provided in their loan agreement and these were: take a further fixed interest rate term, switch to a variable interest rate or a switch to a tracker interest rate. The Bank pointed out the loan agreement stated this choice was subject to the prevailing interest rates.

The Bank went on to advise that it had ceased to offer tracker interest rates in 2008 and that consequently, the Complainants could not switch the portion of the mortgage on the fixed interest rate to a tracker interest rate as the tracker interest rate was not a prevailing rate.

The Complainants were unhappy with this decision as they felt contractually entitled to avail of a tracker rate.

While the Ombudsman accepted that the Bank was entitled to stop offering tracker rates as a product, he noted that the Complainants had only switched a portion of their mortgage to a fixed rate. The remaining portion of the Complainants' mortgage had remained on a tracker interest rate. Consequently, as part of the Complainants' mortgage was subject to a tracker interest rate, the Ombudsman was satisfied that this was a prevailing rate within the terms of the loan agreement.

Accordingly the Ombudsman directed the Bank to place the relevant portion of the mortgage onto the tracker rate currently applicable to the remaining portion of the mortgage, backdated to expiry of the fixed interest rate term.

Tracker Mortgage Complaint Not Upheld

The Complainant took out a mortgage with the Bank in 2007. The complaint was that the Bank did not act in the Complainant's best interests in advising her to move to a fixed rate of interest from her tracker rate in 2010.

The Complainant advised that the terms of her mortgage included a fixed rate of interest for two years, thereafter moving to an interest rate of ECB +1.15% tracker. The Complainant stated that at the end of the two-year period she and her husband received a letter from the Bank confirming that their mortgage was to move to a standard tracker rate which was then 2.15%, which she subsequently availed of. The Complainant alleged that she then received numerous letters and calls from the Bank to switch back to a fixed rate. The Complainant states that she was advised to move to the fixed rate for a further period of time and she decided to take the advice and moved back to the fixed rate of interest. The Complainant submitted to the FSO that this was bad advice and subsequently discovered that after the fixed rate period would expire, the loan would not revert to the standard tracker rate but to a variable rate, which had not been advised to her by the Bank.

The Bank stated to the FSO that its staff members can only provide customers with sufficient information regarding the interest rate products in order to allow them make an informed decision, which best suits their needs. Any final decision reached rests solely with the customer. The Bank stated that it had issued the Complainant with a fixed rate authority form which clearly outlined the implications for amending the interest rate of a house mortgage. The Bank contended that the Complainant was under no obligation to amend the interest rate of her house mortgage.

The Ombudsman referred to the covering letter issued by the Bank to the Complainant in March 2010 as part of the fixed rate authority form and this clearly stated:

'Please note if you opt for a further fixed rate and your current default interest rate option is a tracker rate, at the end of this new fixed rate period the tracker Interest-rate option will no longer be available, and your mortgage will default to a Standard Variable Rate'.

The Ombudsman found that this letter unequivocally put the Complainant on notice as to the fact that she would lose her tracker rate indefinitely in fixing her interest rate. The Complainant received this letter and accompanying fixed rate authority form in March 2010 and returned it to the Bank in April 2010, which the Ombudsman concluded provided the Complainant with ample opportunity to consider her options in relation to her mortgage interest rate. The Ombudsman further determined that the Complainant made the independent decision to fix her interest rate, based on her circumstances at the time. The Ombudsman did not find any evidence in this case that the Bank actively encouraged the Complainant to switch rates or pressurised her in any way.

There was no evidence in this case to support the Complainant's allegation that she received numerous calls and letters from Bank representatives encouraging her to switch from her tracker rate to a fixed rate. The complaint was therefore not upheld.

Motor Insurance - Subrogation Complaint Not Upheld

The Complainant had a motor insurance policy with the Company in question. The complaint related to a dispute over the Company's settlement of a third party claim on the Complainant's policy.

Regarding the incident, which gave rise to the third party claim, the Complainant claimed that the third party backed into him and admitted liability but subsequently changed her mind. The Complainant stated that he had witnesses, but that the Company failed to act or follow up on same. As the Company decided to settle the claim the Complainant's premium has since increased by €3,000, which he was not happy about.

The Complainant's case was that the Company settled the third party claim without fully investigating the incident.

The Company provided details of its assessment of the claim and confirmed that it appointed a Motor Assessor. Following its investigations it decided to settle both the Complainant's claim for the damage to his own vehicle for the amount of €2,275.00 and also settled the claim from the third party for their damage.

The Company referred to the General Conditions of the motor insurance contract, which it stated allow it to take over and carry out the defence or settlement of the claim.

The Ombudsman determined that when the Complainant took out this motor insurance policy he entered into a legally binding contract with the Company. Both parties to this contract must abide by its terms and conditions. The Ombudsman had to have regard to the terms and conditions of the policy in addition to the regulatory requirements for insurance companies when handling insurance claims.

The Subrogation clause is one of the main conditions and it allows an Insurance Company to take over and either contest or settle a claim on behalf of the insured. This means that if a third party submits a claim against the policyholder or other insured stating that the policyholder damaged his/her vehicle or that he/she incurred personal injuries following an incident with the policyholder, the Company may decide, under their subrogation rights, to settle the case. Insurance companies generally do not need the permission of the insured to do this under the terms of the subrogation clause.

In the Complainant's case this Subrogation clause stated that the Company "...will be entitled to take over and carry out in your name (or in the name of any other insured person) the defence or settlement of any claim....... We will be able to decide how any proceedings or settlements are handled."

The Ombudsman found that the Company complied with the requirement of the Consumer Protection Code that once a claim is settled against a third party the policyholder must be informed in writing of the final outcome of the claim and the final settlement figure.

The Ombudsman found that, having regard to the Company's subrogation rights under the motor insurance contract, the complaint against the Company could not be upheld.

Motor Insurance Complaint Not Upheld

The Complainant held a comprehensive motor insurance policy with the Company which commenced in February 2010. The Complainant was involved in a one car collision on 23 August 2010. The Complainant submitted a claim to the Company in respect of the damage caused to the vehicle. The Company declined the claim on the basis that the Complainant had breached the policy conditions by not maintaining the vehicle in a roadworthy condition.

The relevant condition of the policy provided:
"Care of Vehicle
The insured shall take all reasonable steps to safeguard the insured vehicle against loss, damage or breakdown. The insured vehicle must also be maintained in an efficient and roadworthy condition...."
 
General Exceptions and Conditions,
Exceptions:
The insurer shall not be liable in respect of any claim arising while the insured vehicle is being used or driven:
To the knowledge of the insured in an unsafe or unroadworthy condition. ..."

The evidence submitted to the office established that at the time of the incident at least one of the vehicles tyres were below the legal tread depth requirement - the requirement being a minimum of 1.6mm for the full tyre width. The parties disagreed in respect of the tread depth of a second tyre.

The Ombudsman found that there had not been due observance or fulfilment by the Insured of the policy terms and conditions; the vehicle had not been kept in a roadworthy condition. Consequently, the complaint could not be upheld, as the Company was entitled to decline the claim.

Employers' Liability Claim Complaint Not Upheld

The Complainants in this case were sole traders. They held an insurance policy underwritten by the Provider providing cover for public/products liability, personal accident, and employers' liability.

The complaint referred to the Ombudsman related to a claim under the employer's liability section of the policy, following a personal injury claim against the Complainants by a former employee. The Provider had declined liability for the claim on the grounds that the Complainants breached two conditions precedent to liability under the policy by (a) failing to notify the Provider within a reasonable period of time of the potential claim under the policy and (b) in so doing, failing to observe and fulfil the conditions of the policy.

The Provider maintained that both of these General Conditions were precedent to the underwriter's liability for any claim under the policy. The Provider stated that, despite these requirements, it was not notified of the incident until over 3 years after the accident occurred, by which time its position had been significantly prejudiced.

Without commenting on the cause or nature of the accident in question, it did not appear to be disputed by the parties that a former employee of the Complainants had sustained an injury in the workplace in the Spring of 2001. It was a condition of the Complainants' policy that the policyholder must "as soon as reasonably practicable" notify the Provider in writing about any incident "which may give rise to a claim" under the policy, and furnish the Provider with any information required in this regard. The policy document was clear and unambiguous in this regard. 

The submissions supported the Complainants' case that they had not been formally notified of the personal injury claim being brought against them in the High Court until the Spring of 2004. However, the submissions also showed that the Complainants had been aware of the accident when it occurred, some three years earlier. Whatever the Complainants' own opinion at that time about the nature or cause of the accident or the likelihood that it might give rise to a claim, from an examination of the evidence submitted, the Ombudsman's view was that it would have been reasonable for the Complainants to anticipate that the incident might give rise to claim against the employers' liability section of their insurance policy. In these circumstances, the policy required that the Provider be notified as soon as reasonably practicable of the incident. The Provider was not notified of the incident until three years after it occurred. The Complainants thereby failed to adhere to, and acted in breach of, the terms and conditions of their insurance policy, and in so doing prejudiced the Provider's ability to adequately investigate and defend the action.

In these circumstances, the Ombudsman found that the Provider was entitled to decline liability for the Complainants' claim. The complaint was not upheld.

Retail Foreign Exchange Complaint Upheld

The Complainant wanted to change $61,630 into Euros. The Complainant sought the advice of the Bank and was advised to open a Demand Dollar account which she did on 2 July 2010. The Complainant was then able to monitor the exchange rates and make the decision to change the funds held from Dollars to Euros when the best exchange rate was available. The Complainant sought the advice of a number of the Respondent Bank's employees in this regard at various branches and claimed that she had received conflicting advice.

The Complainant submitted that she had no knowledge of foreign exchange and therefore was at the mercy of the Bank's staff. The Complainant's main goal was to be given a rough idea as to when it was a good time to complete the exchange. The Complainant stated that she received so many conflicting views that it confused her. The Complainant asked the Bank to calculate the lowest and the highest rates and claimed that because of the poor training given to the Bank's staff she lost approximately €3,500 in the transaction.

The Bank stated that it provided the exchange rate to the Complainant when she attended at the Bank but did not give any advice regarding the best exchange rate. The Bank submitted that due to the fact that the Foreign Exchange rates fluctuate on a daily basis it is not the practice of the branch staff to advise customers of possible future rates.

The Complainant submitted that she did not seek advice from the Bank in order to speculate on dollar/ euro exchange rates in order to profit from the funds. The Complainant stated, ‘All I wanted to know was do you sell when the rates are high or low that's all. I did not want any member of staff to predict the movement of the world's financial economy but that's how they have twisted this scenario'.

The Complainant had made withdrawals between 5 July 2010 and 30 September 2010 and claimed that on the advice of the Bank she had exchanged the dollars when the conversion rates were high when in fact it would have been more beneficial if she had decided to sell the dollars when the conversation rates were low.

It was clear from the submissions that when the Complainant approached the Bank and sought its advice in relation to the most appropriate manner in which to lodge dollars, that the Bank had advised the Complainant of the benefits of opening a US Dollar demand account as she did not intend to immediately convert the dollars to euro. At the time the Complainant opened the account the Bank was of the view that it was her intention to monitor the rates on offer at regular intervals and then complete the exchange. The Bank submitted that it had indicated to the Complainant at the outset, that she would need to monitor the rates, as it is not the Bank's policy to advise on the fluctuation of rates, due to the frequency with which exchange rates change.

The Ombudsman accepted that the Bank's policy is that branch staff do not give specific advice or guidance in relation to the conversion or exchange of foreign currency. However he accepted that the Complainant had only sought general guidance on whether it was best to sell when the dollar was strong or when it was weak. This was different from seeking specific advice on whether to sell at a particular identified daily rate, which would clearly be contrary to the Bank's stated policy.

The evidence established that the Complainant had continually made withdrawals when the conversion rate was high. The Complainant made the case that she made the decision to conclude the transactions on these dates, based on information received from the Bank. The Ombudsman was satisfied that at the time the Complainant opened the account she intended to make ongoing withdrawals in order to avail of the most favourable rates and continually concluded transactions when the exchange rates were high. The Complainant's assertion that she made this decision after receiving information from the Bank was in keeping with the pattern of the transactions. However the manner in which the information was sought was not clear. The enquiries made of the various staff members appeared to have been informal and if information was provided, which it appeared it was, the Ombudsman did not believe it was furnished by the Bank in a formal manner on foot of an express request. This was supported by the fact that the Complainant sought advice from numerous members of staff and received conflicting replies.

The Ombudsman was satisfied that the Bank provided information to the Complainant in reply to general enquiries about whether she should sell when the dollar was strong or weak. He took the view that the Complainant was therefore entitled to receive some compensation for the loss incurred as a direct result of relying on this information. However this needed to be balanced against the fact that the information was sought in an informal way. While the informality of the enquiry lessens the degree to which the Bank breached its own code of practice, Bank employees providing information must always exercise care when doing so in a professional capacity, even if done on a less formal basis. The fact however that the Complainant by her own admission received conflicting information and did not seek to clarify which position was incorrect, also reduced her entitlement to receive compensation for the full amount of the loss.

The Complainant stated that the Bank had assessed the value of the loss at approximately €3,500 but this was based on the Complainant concluding the transaction at the optimum value on each occasion and the assessment had been made with the benefit of hindsight when considering the value of the dollar on any given date.

When this fact, together with the Complainant's failure to clarify which form of information was correct and her failure to seek formal advice from the Bank, was taken into account the Ombudsman was of the view that €750 was an appropriate level of compensation for the loss suffered by the Complainant and accurately reflected the Bank's influence on the decisions made by the Complainant.

Investment Mis-selling Complaint Not Upheld

The Complainant was sold a geared investment by his Bank. The Complainant stated that he was never advised of any risk which was associated with the investment.

The Complainant stated that his Bank sold him an inappropriate and incorrect financial product resulting in consequential financial loss. The Complainant stated:

  • He did not have an opportunity to review the documents which he signed during the investment meeting and;
  • A named Bank Official had already completed various documents either at or before the investment meeting and simply asked the Complainant to apply his signature>
  • He was never advised of the risks associated with the geared investment.

On investigation of the complaint, the Bank determined that the Complainant received an investment commensurate with his financial needs and objectives. The Bank stated that the Complainant had been issued with all relevant investment documentation and that he had not availed of the cooling-off period which could be interpreted to mean that the Complainant had been satisfied with the investment.

The evidence showed that:

  1. There was no evidence that a named Bank Official had already completed various documents either at or before the investment meeting and that the Complainant was asked to apply his signature to completed documents.
  2. The Complainant freely and voluntarily signed both the Fact-Find and the relevant investment product application.
  3. The features of the investment, as well as any risk involved, were most likely explained to the Complainant and were certainly outlined in the documentation which was issued to the Complainant.

The complaint was not upheld.

Irish Credit Bureau Complaint Upheld

The Complainant arranged a personal loan with the Bank to be repaid in 48 instalments.

The Complainant was unable to meet his repayments and he was contacted by a third party on behalf of the Bank who wished to collect the outstanding loan amount. The Complainant agreed to make a one off payment to settle the account. After the account was settled the Complainant discovered that the Provider had recorded with the Irish Credit Bureau that the Complainant had missed a series of payments and defaulted on his account.

The Complainant disputed the information recorded by the Bank with the Irish Credit Bureau.

As part of his investigation the Ombudsman requested a copy of the loan agreement from the Bank. However, the Bank was unable to produce a copy of the Complainant's loan agreement.

In such circumstances the Ombudsman was concerned that if the Bank could not locate the Complainant's loan agreement it could not say how, or even if, the Complainant had breached the terms of his agreement with the Bank. Consequently, if the Bank could not say what breaches of the loan agreement the Complainant had made, the Ombudsman did not see how it was fair that the Bank could record such breaches with the Irish Credit Bureau.

The Ombudsman noted that Chapter 2.49 of the Consumer Protection Code provides that "a regulated entity must maintain up-to-date consumer records containing at least the following...f) all documents or applications completed or signed by the consumer....Details of individual transactions must be retained for 6 years after the date of transaction. All other records required under a) to h), above, must be retained for 6 years from the date the relationship ends".

In absence of the loan agreement the Ombudsman found that the Bank was not entitled to record that the Complainant was in arrears or that he defaulted on payment of the loan.

The Complaint was upheld.

The Ombudsman accordingly directed the Bank to remove the record of this loan agreement in its entirety from the Irish Credit Bureau database.

Life Policy Complaint Not Upheld

The Complainants incepted a life policy with the respondent Company in June 2009. The Complainants' policy was an open ended unit linked plan.

The Complainants submitted that the Company had recently reviewed their policy and, as a result of this review, the Complainants' premium increased by 200% for the same level of cover.

The complaint was that the Company wrongfully increased the Complainants' premium in respect of their cover, in circumstances where their level of cover remained the same.

The review clause in the Life Policy document stated as follows:-

"At each Policy Review Date the Company's Actuary will:

Review the Policy Fee and may adjust it to the level compatible with the scale then being charged by the Company for similar policies or to such level as the Company's Actuary deems appropriate."

Having carried out a review of the Complainants' policy, the Company informed the Complainants that their monthly premium plus their attaching fund value would be unable to maintain their Life Cover benefits until the next scheduled Plan Review Date on 01 June 2016.

The Ombudsman found that as the Complainants' premium was not sufficient to maintain their current level of life cover, the Company was correct in requesting the Complainants to either increase their premium or reduce their level of cover.

Pension Transfer Values Complaint Partly Upheld

The Complainant held five pension policies with a Life Assurance Company. The Complainant engaged the services of another Life Assurance company to advise on the establishment of a separate pension plan for his retirement. The Complainant was advised by his new Life Assurance Company to transfer his pension funds from his original pension plan to a newly established pension plan. Transfer values were obtained from the Complainant's original Life Assurance Company and the transfer was completed. However, the Complainant subsequently discovered that the transfer was completed on the basis of lower transfer values leaving a shortfall of €15,000.

The complaint was that the Respondent had failed to apply the correct transfer values to the transfer of the Complainant's pension policies. The Complainant stated that he held audio recordings to support his assertion.

On investigation of the complaint, the Life Assurance Company contended that the correct transfer values had been used when transferring the pension funds to the Complainant's new pension fund.

The evidence showed that:

  1. The telephone recordings unfortunately did not provide much assistance in clarifying the issue.

  2. The parties demonstrated through their conduct and correspondence (including telephone conversations) that a strict application of the terms and conditions of the policies would not apply.

  3. The terms and conditions of the original pension policies were unclear as to the applicable transfer date and value.

  4. There was a lack of clarity in the communications (written and verbal) between the parties.

In an effort to do justice between the parties in what was not a clear cut issue, it was decided by the Ombudsman that the difference between the two disputed transfer values be shared equally between the parties. This complaint was partly upheld.

Pet Insurance Complaint Upheld

On 3 June 2006 the Complainant incepted a Pet Insurance Policy for her Rothweiler; the dog tore her right cruciate ligament in November 2009. More than 3 years earlier in June 2006, and within the first 14 days of the policy, the dog, then a puppy, had injured the left cruciate ligament, but no difficulties had been experienced in between these two separate incidents.

The Company declined the Complainant's claim for benefit on the basis that the dog's right hind lameness in 2009 was linked to the left hind "cruciate disease" which the Company said dated from June 2006. The Company referred to the policy provision which stated that no cover would be provided for:-

"Any illness which is the same as, or has the same diagnosis or clinical signs as an illness that first showed clinical signs within 14 days of your pet's cover starting; or, an illness that is caused by, relates to or results from a clinical sign that was first noticed within 14 days of your pet's cover starting no matter where, in or on your pet's body, the clinical signs were noticed".

The Company maintained that as the left hind cruciate injury had been discovered within the 14 day period referred to in the policy clause, and the 2009 right hind lameness was linked to this earlier incident then, unfortunately, no cover could be provided to the Complainant's dog.

The Company also sought to maintain its position on the basis of certain studies referred to indicating that "cruciate ligament rupture is the manifestation of a chronic degenerative disease of the stifle joint in the dog and as a bilateral condition affecting both limbs. A very tiny number of cruciate tears are seen in animals that have suffered a severe traumatic injury, such as a road traffic accident. In these cases, no osteoarthritic changes are present in the joint and you would not expect to see the condition in the other leg".

Having considered the evidence at length, the Ombudsman took the view that the Company had incorrectly formed the opinion on the basis of the information and forms completed by the relevant veterinary surgeons that the two injuries were "similar" or "related". The Ombudsman took the view that the manner in which the 3-way question was posed on the form was anything but clear and the spacing provided by the Company on the form to be completed by the vet, was such that the information given might well relate to any portion of the question which had been posed. The Ombudsman was unimpressed with the manner in which the question had been drafted, utilising wording which was not the wording referred to in the relevant policy condition, and failing to query specifically whether the injury being claimed for was "caused by, related to or resulting from" the animal's history.

The Ombudsman noted that the medical notes dating from 2006 did not show a previous diagnosis of any cruciate rupture at that time. He took the view that the Company, in assessing the claim had confused an accepted pre-disposition to injury of the cruciate ligament, in certain breeds, with specific evidence, or absence thereof of a previous diagnosis of a cruciate rupture in 2006. The Ombudsman found that it would be unduly harsh to interpret the policy provisions so as to exclude the Complainant's claim for the injury to the dog in November 2009, owing to a reference in the medical notes to nothing other than a "slight give" in the cruciate of the other leg 3½ years earlier (which had healed without intervention). The Ombudsman upheld the complaint and directed the claim to be admitted and assessed for payment in the usual manner.

Property Investment Complaint Upheld

This complaint related to the sale of a property based investment. The complaint was that due to the Policyholder's age (73) and circumstances (ill health) the investment had been mis-sold to her by the Company.

The issues for investigation and adjudication were (i) whether the property investment was mis-sold and (ii) whether the Company correctly dealt with the complaint when it was brought to its attention.

The documentary evidence showed that the investment product was not a guaranteed product and its value was therefore subject to the rises and falls in the market. The Ombudsman found that the policy information supplied to the Complainant made this clear. Policyholders must play their part in the investment process by taking time to read the policy and supporting documentation, mindful of their needs, objectives and responsibilities. However, the Ombudsman held that while the policy documentation and what was contained therein is important, the sales process must also be robust. There is a responsibility on a financial provider to make sure, as far as possible, that the products and services it offers match the policyholder's requirements. There is also a duty to explain the main features of the products and services that it offers. He was not satisfied that all that could have been done with this sale was done to the highest degree.

The following were the concerns that the Ombudsman had, and he found that they merited a finding in the Complainant's favour:

  • No comparison or detailed advice was recorded in the financial review documentation as having been given to the Complainant, on retaining the Guaranteed Product that she already had or entering a similar product type as opposed to investing in the Property Investment.
  • There was not enough evidence of the advices given regarding diversification of funds at the initial investment stage or when the Complainant later expressed her concerns about the falling value of the Property Fund. No alternative options were given when the Complainant first expressed her concerns.
  • On the Financial Review the Agent entered the fund choice as being 100% diversified but in the free text box he advised that the customer was investing 100% in Property. This clearly was contradictory and something that was likely to mis-lead the policyholder.
  • Although not selecting the investments recommended by the Advisor, the Complainant's attitude to risk had not been altered on the review form. It was found that more detailed information should have been supplied to the Complainant at this stage to highlight what affect the change from what had been recommended by the Advisor had or the risks she was facing. More attention should have been drawn to the possibility of greater losses on her initial capital sum, should the investment not perform as expected or indicated.
  • The Company accepted that it failed to send the Final Response Letter within the 25 day timeframe and it apologised for this.
  • The Company did not suggest that it offered the option of having somebody else present at the investment meeting and the Complainant confirmed that this option was not offered. At the very least, the Ombudsman considered that such an option should have been offered.
  • It was considered that some detail of what was involved with a property fund investment in comparison to other types of investment should have been included in the sale documentation, but was not. This would have included the possibility of the introduction of a 6 month waiting period for exits from the fund. The absence of this information weakened any claims from the Company that such matters were explained in detail>
  • It was found that there was little detail in the Financial Review of what explanation was given by the Financial Advisor on what were the benefits to the Complainant of investing in the recommended products over and above other investments and without evidence of such information having been shown to have been discussed, the Ombudsman was not satisfied that a person with little experience of investing could make an informed decision on what investment to choose.
  • Upon reviewing the Complainant's letters (outlining her circumstances i.e. that she was terminally ill), the Company accepted it should have made contact to query whether she needed to avail of an "advance", other than the automatic income payment paid every year, while awaiting the end of the six month notice period.

Having reviewed the case, the Company felt that when taking the Complainant's age into account that there was a potential vulnerability and while it was satisfied the Advisor had advised her about the capital protected products and warned despite its strong performance, that property did contain a level of risk, that it would offer to refund the original investment, less any withdrawals made. The Company also offered to provide an additional amount of money which the Complainant could have earned if she had been invested in a secure fund.

In conclusion and based on the points outlined above, the Ombudsman found that the Complainant could have been better advised at point of sale about the investment she was entering into. While the documentation that was provided explained the nature and workings of the investment, the Ombudsman was not satisfied that the fullest explanation of the product had been verbally given at point of sale. He also found that the Advisor's opinion of the non-suitability of the chosen product mix (i.e. he was said not to have recommend the 100% investment in property, but later suggested a 75% property / 25% equity split) could have been better set out for the Complainant's consideration.

While advanced age does not preclude such investments to an older person and the independence of a person of full mind and body to make their own decisions must always be respected, the Ombudsman considered that such a discrete measure as offering the option to the policyholder of having another person accompany her when making such important decisions, would not have been out of place.

Having regard to all of the above, it was found that the complaint was upheld and the Company was directed to refund the original investment, less any withdrawals made, together with an additional amount of money which the Complainant could have earned if she had been invested in a secure fund. The Company was also directed to pay the additional compensatory amount of €2,500. This amount was awarded particularly in light of the Company's failings when the matter was first brought to its attention and upon it being advised of the Complainant's terminal illness.

Leisure Craft Complaint Not Upheld

The complaint in this case was that the Provider had wrongfully declined to settle the Complainant's claim under her insurance policy for water damage to the engine of her speedboat caused by the accumulation of rainwater. The Provider had declined the claim on the grounds that the Complainant had breached the policy conditions by failing to remove the drain plugs when the vessel was taken out of the water.

It was a condition of the Complainant's policy that the Provider would only provide indemnity if the insured had taken all reasonable steps to maintain and keep her boat and all its gear and equipment in good condition and the insured had taken all reasonable steps to protect her insured property from loss or damage. The observance by the insured of this general policy condition relating to a duty of care was a condition precedent to any liability of the Provider.

The Complainant argued that, during the winter in question, she had stored her speedboat ashore on its road trailer under two protective covers and that she inspected it there regularly. The Complainant argued that there was no condition under the policy compelling removal of the drain plug during storage. The Complainant sought full settlement of her claim on the basis that she had taken all reasonable steps to store the boat safely under cover, to protect the boat and to prevent loss.

The only report submitted in relation to the cause, nature and extent of the damage to the Complainant's boat was the report of the marine consultant who had inspected the damaged speedboat on behalf of the Provider. The marine consultant noted that "the vessel has a bronze screw type drain plug in the transom. This plug should be removed when the vessel is lifted from the water as this permits any rain water to drain immediately". The report went on to identify the cause of loss as follows: "There is only one possible cause of loss in this incident. The insured failed to ensure that the drain plug was removed when the vessel was placed in storage. If it had, the problem with the covers lifting would not have caused the engine to be submerged".

In the absence of any report to contradict the marine consultant's findings as to the cause of the damage to the Complainant's boat, the Ombudsman accepted these findings. Thereafter the issue to be determined was whether the Complainant's failure to remove the drain plug when the vessel was placed in storage, excluded the Complainant from claiming under the policy. In other words, was it reasonably foreseeable that, by failing to remove the drain plug, the damage complained of might have occurred? His view was that the Complainant's failure to remove the drain plug increased the risk that the insured vessel would sustain rain water damage in the event that the covers became untied.

Accordingly, he found that the Complainant did not take all reasonable steps to protect her property from loss or damage and that on these grounds the Provider was entitled to decline liability for the claim. For this reason the complaint was not upheld.

Health Insurance Complaint Upheld

A woman who was suffering from bowel cancer, held a policy with a healthcare provider. She had previously undergone surgery to address her medical issues and 18 months later her Consultant requested that she undergo a PET-CT scan. When the Complainant sought to recover benefit from the healthcare provider for the cost of the scan, the claim was declined on the basis that the claim for benefit failed to satisfy the policy criteria to be met.

In responding to the Ombudsman's investigation the healthcare provider sought to rely upon data from the National Comprehensive Cancer Network to the effect that a PET-CT scan is not routinely recommended.

When the Ombudsman considered the terms of the policy he noted that the policyholder had been referred for the scan by her Consultant, she had arranged to have the procedure carried out at an approved location and the reason indicated on the Claim Form for the scan was the "re-staging of colorectal cancer"; the policy's Schedule of Benefits specified that a PET-CT scan is provided, for "diagnosis, staging or re-staging of colorectal cancer".

The Ombudsman noted that the internal memos of the healthcare provider stated that there was no evidence of recurrence of the cancer and therefore the claim did not meet the criteria. The Complainant however relied on a letter from her Consultant explaining that the scan was required as the cancer was high risk, being node positive and requiring chemotherapy. In addition owing to a number of cysts in the Complainant's liver, the Multi-Disciplinary Team concurred that a PET scan would be reassuring. With the benefit of the scan having been undergone, the Consultant also made the point that two abnormalities would not have been discovered had the Complainant not undergone the scan in question; the healthcare provider suggested that it was likely that these abnormalities would have been identified by way of CT scan.

When the matter was considered by the Ombudsman he noted that the list of circumstances relied upon by the healthcare provider, in which it would provide benefit for a PET-CT scan, made it clear that benefit would be provided when it was suspected that conventional investigations would be insufficient for the clinical management of the patient. He noted that the healthcare provider stated that this aspect was not satisfied in this instance.

The Ombudsman took the view that the healthcare provider had been unreasonable in its approach to the assessment of the Complainant's request for pre-approval of the benefit. In his opinion it was irrelevant as to whether PET scans were routinely performed in such circumstances. What mattered in this instance is that both the Treating Consultant and the Multi-Disciplinary Team had formed the view that the PET scan was warranted in the particular circumstances. He upheld the complaint and directed payment of the claim in full together with an additional compensatory benefit in the sum of €700.