Failure to handle customer complaints in the correct manner amongst a number of insurance firms could result in the Irish central bank taking action.

The central bank, which is responsible for financial regulation in the country, found in a report that none of the 12 insurance firms inspected were fully compliant with the consumer protection code. They failed to acknowledge complaints in writing, to assign an individual point of contact for complaints, or to inform consumers of their right to appeal to the financial services ombudsman.

A statement by the central bank said: “A number of firms had a particularly low level of compliance in relation to complaints handling. The central bank is considering enforcement action for a number of firms.”

However, Hans Grefte, product development director for UsefulFeedback! at iCasework, believes that little can be done to raise compliance levels.

“No matter how much the Central Bank of Ireland warns and makes examples of insurance firms that do not comply with the complaints handling elements of the Consumer Protection Code, it will ultimately remain disappointed at compliance levels.

“This is because the Irish financial sector’s compliance is largely undermined by the lack of focus on root cause analysis as a fundamental part of the complaints management process.

“What is so frustrating is that this situation can be easily addressed and minimised. Effective and transparent processes are expected by the Central Bank to enable firms to deal with each complaint in a prompt and efficient manner,” he said.

Grefte added that root cause analysis, when added to the complaints management process, allows a company to identify systemic or recurrent problems that currently reside in a business – which can then be rectified to reduce the number of complaints or to improve service levels.

“Without such insight, financial organisations will continually displease the regulator and face the potential of costly penalties, as complaint volumes increase and they suffer from an inability to provide satisfactory complaint outcomes for their customers.”

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