Do Irish finance firms prey on the elderly?
By Charlie Weston
Name finance firms that prey on the elderly, says watchdog
Mr Meade said it appeared some elderly people were being treated as easy targets by banks, brokers and insurance firms.
He called on financial institutions to carry out a review of all investment products sold to elderly customers since 2006.
The ombudsman said it would be in the public interest if he could name persistent offenders who sold inappropriate products to older people.
But he accepted that his legal advice was that it would be difficult to name a firm complained about and not also name the consumer who made the complaint.
Any attempt to name and shame rogue firms targeting the elderly would be likely to end up being challenged in the courts, he conceded.
He said it appeared that many people were “preyed on” by financial institutions.
Staff at some finance houses had received “nice commissions from easy targets, many of whom were investing the proceeds of the sale of property during the boom, without knowing the intricacies of the products concerned”, the ombudsman said.
Mr Meade yesterday published details of some 27 cases he had dealt with in the last six months, with more than a quarter of the complaints from elderly people.
He did not name the complainants or the institutions, but called for more respect for older customers.
The single biggest award was made to two investors in their 70s who has been advised by a bank to take their life savings, which had previously been in a deposit account, and to invest them in a managed fund.
Other complaints from the elderly included a widow in her 80s who complained she was persuaded to buy a six-year bond. In just three cases alone which involved elderly people, the ombudsman ordered a total of €1.2m to be refunded.
Mr Meade told the Irish Independent that he was now receiving complaints from elderly people alleging that they had been persuaded to take out loans against their better judgment.
One loan was for more than €200,000, but the complaints about the loans were only being investigated at the moment.
Dermot Kirwan, of Friends of the Elderly, said: “There are many elderly people living alone who are asset rich but cash poor. They are confused by conflicting advice from family members, bank managers, pension advisers. They need someone impartial that they can trust.”
Bank must pay back couple’s life savings
ONE of the cases decided on by the Ombudsman related to a couple in their 70s who had their life savings of €345,000 on deposit in a bank.
They were contacted by the bank in 2005 and advised they would get a better return if they put their money in a managed fund.
But in 2008, the couple were contacted by the bank and advised to switch the investment back into cash as the fund was “losing heavily in value”.
The original €345,000 investment was now worth just €265,00, a loss of €80,000. And there would be a penalty of €9,000 if the remaining money was withdrawn.
The complainants claimed it was only then that it was explained to them how the investment worked and in particular that 70pc of it was based on stock market performance.
Most of the money had been invested in an Irish-based property fund to be invested for more than five years.
The couple claimed they had never been told this and that they would not have entered into an investment based on stock market and property market performances. They said the investment was not suitable for them.
Ombudsman Joe Meade ruled that the bank had “not exercised appropriate care and caution in dealing with the complainants, given their age and investment inexperience”. The ombudsman directed that the full amount paid for the investments, €345,000, be returned to the couple