Irish Financial Regulator – Bizarre and toothless

Utterly bizarre is the only appropriate description for the title of the Irish Financial Regulator’s 2006 annual report. The report, published last week, is entitled

‘Protecting Consumers Through Effective Regulation’.

Clearly, someone within this secretive organisation has an ironic sense of humour because protecting consumers is not, and never has been a priority for this so called regulator. Indeed, it seems to have only one policy and that is to protect at all costs the interests of the rampantly corrupt Irish financial sector. As most Irish consumers know to their great cost there is any number of financial institutions out there who would put the mafia to shame in their ability to rob customers.

Yet, since its establishment in May 2003, this toothless tiger has failed to take action against even one of these dodgy organizations. According to the regulator’s consumer director, Mary O’Dea ‘Ifsra wants to work with the industry to prevent further errors’. In fact, it is reasonable to assert that the so called financial regulator actually protects and encourages ‘wrongdoing’ within the financial sector. It does this in three principal ways.

1. Language: The regulator never uses words like ‘theft’ ‘crime’ or ‘corruption’. It only uses words/phrases like -‘Procedural errors’, ‘acted wrongly’, ‘improper charging’, ‘overcharged’, ‘breakdown in procedures’, ‘billing mistakes’.

Words and how they are delivered are important in understanding what a person/organisation means and can send a powerful message to the listener/reader. The message from the Irish financial regulator is –

These are not really crimes so we don’t need to take any real action.

The message the corrupt institutions take from this is –

No crime, no punishment – great, let’s get working on the next scam.

The message for the consumer is –

No regulation, no justice, no hope.

2. Refusal to use its powers of sanction: The regulator can impose fines of up to €5million on a company and €500,000 on an individual for ‘improper behaviour’. It has never done so; neither have any of its predecessors. In fact, no punishment has ever been meted out to errant institutions by any so called Irish financial regulator since the foundation of the state in 1922. The message here needs no further analysis.

3. Secrecy: This is the most powerful weapon the Irish regulator posses for its defence of corruption in the financial sector. It is the official policy of the Irish regulator to keep secret the names of all firms found guilty of ‘overcharging’ their customers. This policy protects the guilty and obviously puts consumers at a serious disadvantage.

Let’s just examine this year’s corrupt activities. According to the regulators annual report 36 different institutions ‘overcharged’ customers by over €50 million between May 2005 and May 2006 – Yes, that’s right, €50 million and this is referred to as ‘Procedural errors’.

From past experience it is reasonable to assume that much of this €50 million was stolen rather than accidentally ‘overcharged’. Irish citizens, however, will never know what companies are plundering their accounts because the regulator has decided that their identities will remain a State secret.

Neither will any of these institutions face the inconvenience of a police investigation as they effectively operate outside the law of the land. The regulator is the only ‘authority’ that can impose any restraint on their corrupt activities and to date he has refused to do so.