Interested in maladministration. Estd. 2005
I nearly fell out of the chair recently after watching a news report (7th item) in which farmers said they were happy.
The reason for their happiness was a massive increase in profitability due to escalating prices.
Fortunately, my chair stabilised on hearing, in the same report, a farmer complaining about other industries making a profit due to escalating prices.
Below is an editorial published in the Irish Independent in response to the ‘overcharging’ of customers at Ulster Bank.
Thursday August 23 2007
There is something Pythonesque about the vision of Ulster Bank chiefs sitting in emergency session to discuss their over-charging of customers. Do they — and the other 34 banks and finance firms who have been forced to pay back money that they have “borrowed” from their customers — wonder aloud how this terrible thing could have happened?
Do they express amazement that the checks and balances, so efficient when tracking down customers who do not pay on time, or who exceed their overdraft agreements, somehow failed to function properly when required to work the other way around? To a senior bank official, it must feel as though his Porsche or Merc has inexplicably re-fused to reverse into the executive parking space.
The bank has admitted that it wrongly billed customers for insurance policies on loans that were paid back early and has been suitably excoriated by the Consumers’ Association for allowing the overcharging to happen and failing to immediately disclose its magnitude.
One curious aspect is the fact that some 25,000 people apparently failed to notice that they were continuing to pay what was essentially protection money on a loan they had already paid off in full.
Widespread overcharging, estimated at about €167m has been exposed by internal examinations by the offending institutions, who have been ordered to do so by the Financial Regulator.
Where would we be without him?
The following was my reply to the editor. (Not published)
Sir,
On the assumption that you were not being facetious when you praised the work of the Financial Regulator in last Thursday’s editorial (23rd Aug.), you should be aware of the following.
The Financial Regulator was established in May 2003 after a series of very serious scandals within the financial sector, many of which involved direct theft from customer’s accounts. Consumers were assured that a new era of accountability, transparency and enforcement was at hand. This has not happened.
The regulator was given the power to impose a fine of up five million euros on errant institutions. But even this pathetic fine, which represents about two days profit for some banks, has never been imposed. Indeed, Ireland is unique in the world in that not a single financial institution has ever been fined or charged for wrongdoing since the establishment of the State in 1922. This fact alone should give pause for serious reflection, but there is worse.
One of the stated principles of the Financial Regulator is to
“Help consumers to make informed decisions on their financial affairs in a safe and fair market.”
This does not happen.
By law, the Financial Regulator is forbidden from disclosing any information whatsoever on the nefarious activities of financial institutions. (S.33AK of the Central Bank Act, 1942 as amended by the Central Bank and Financial Services Authority of Ireland Act, 2003).
This law is strictly enforced by the regulator even to the point of refusing to discuss scandals that are already in the public domain. Obviously, this blanket secrecy puts consumers at a serious disadvantage while providing dodgy financial institutions with watertight protection.
You ask the question; “Where would we be without him? (Financial Regulator)” A great deal better off is my answer.
Yours etc.
Anthony Sheridan
“Would you be happy to have your spouse, mother, father, children or constituent travel on an expressway bus being driven by someone who counts his cash takings with both hands as the bus speeds through the countryside at 80kph?”
This was the question a Mr. Bill Murphy asked every TD in the country after he witnessed a bus driver steering his vehicle at speed with his elbows. (Today with Pat Kenny, Thursday)
Mr. Murphy put the question to TDs after heroically trying every other avenue in an attempt to have this bus driver brought to account. Here’s a brief outline of his efforts.
7TH June: (Date of incident) Sent comment form to Bus Eireann. No reply.
End of June: Sent copy to Road Safety Authority. Received letter from Noel Brett, CEO of RSA indicating that he had written to Bus Eireann asking them to deal with Mr. Murphy’s complaint.
6TH July: Received letter from Marketing, Sales and External Communications Department (Phew!) saying that comments were sent to Cork and they would be in touch.
Received letter from Cork saying that their chief inspector would interview the driver. A month has passed and the driver hasn’t even been interviewed? (How many people could have died in that month due to this dangerous practice?)
7TH August: (Two months after the incident). Sent copy of all correspondence to Mr. Tim Hayes, CEO Bus Eireann and Noel Brett of RSA. Received acknowledgement from RSA – Silence from Bus Eireann.
Travelled personally to Dail Eireann to deliver the above question to TDs.
Let’s deal with the bus driver first. There is no way to be nice about this dangerous idiot. He should be fired immediately, charged with dangerous driving and banned for life from being in charge of a vehicle where he would be responsible for the lives of dozens of people.
The management personnel in Bus Eireann should also be fired for failing to protect the safety of commuters.
A bit harsh? Bring to mind television pictures of mangled bodies being removed from wrecked buses.
Amazingly, Pat Kenny expressed sympathy for the driver claiming that perhaps all Bus Eireann drivers drive with their elbows and this man was ‘unfortunate’ in being singled out.
Mr. Murphy is to be congratulated, not just for his efforts to save lives, but also for his persistence against a wall of uncaring bureaucracy.
For decades Irish consumers have been ripped off by rogue businesses because of inadequate protection from the State.
In 2005, in an alleged effort to protect consumers, the National Consumer Agency was set up. Unfortunately, its powers were limited to issuing press releases and highlighting rip offs.
This situation could only have arisen through gross incompetence on the part of civil servants responsible for its establishment, or, it was a deliberate policy to create a toothless tiger.
Two years later, after ‘rip off Ireland’ had become part of our culture, the NCA was (apparently) given;
“Real teeth allowing it to go after the bad guys, investigate suspected offences and refer cases to the DPP.”
(Prime Time).
It was made clear on the same programme that tackling sharp practices in the construction industry would be top of the agenda for the newly empowered NCA. Acting executive chairwoman, Ann Fitzgerald, made her position crystal clear.
“We are been given huge powers and we as a board are not afraid to use them and we will use them.” “Businesses who treat consumers unfairly will be brought to court.”
So called management companies represent one of the greatest rip offs for Irish consumers. Many of these companies are nothing less than ruthless mafia style operations preying on (mostly young) struggling home owners (See analysis here).
When asked about this situation Ms. Fitzgerald said;
“We have set up a forum to address all these issues without needing legislation because the legislation is going to take two or three years and I don’t want to see the half a million people involved left hanging for two or three years.”
Well, here’s news for that half a million people that Ms. Fitzgerald doesn’t want to see left hanging’.
‘Get used to being a victim of these vultures because protection is further away than ever.’
Last Sunday’s Irish Independent reports that yet another quango is being set up with the alleged aim of ‘protecting’ property owners.
So, just when it seemed, after years of waiting; that property owners might get real protection by a regulatory body backed up by tough legislation, the Government decides to start the whole process again.
At this point we can dismiss the NCA as a serious organisation. It’s just the latest in a long line of useless organisation that cannot or will not take real action to protect consumers.
But what about this new government quango with the clumsy title; National Property Services Regulatory Authority (NPSRA)
The first thing that can be said with absolute certainty is that it too will be a completely useless organisation. After all, its principal mission will be to regulate a business closely associated with the government favoured construction industry.
But as an exercise in observing how things are done in our Republic it will be interesting to monitor its progress.
The report tells us that the Law Reform Commission, the Office of the Director for Corporate Enforcement and our old friend the National Consumer Agency have all delivered reports on the property services sector.
Last December the Government approved the drafting of legislation to establish the new regulator. We can safely say, therefore, that it will be many years before the new quango has any real power.
But let’s be generous and predict that NPSRA will be in a position to act in the interest of property owners in, say, five years time. What will happen then? Yes, you’ve guessed. Another quango will be initiated and the whole process will begin again.
In the meantime the NCA has established a “multi-unit development stakeholder forum” (Where do they get these titles). Hilariously, they believe that the ruthless sharks in the management companies sector will actually agree to a voluntary code of practice.
Decade after decade, quango after quango, report after report; promise after promise. There is only one consistent reality – Consumers are still being ripped off.
Ms. Fitzgerald should take herself back on Prime Time, apologise to Irish consumers for giving them false hope and, with her entire board, resign forthwith.
The Smurfit-Kappa Group has sales in excess of €7 billion.
The Smurfit-Kappa Group had a contract with a sheltered workshop at Peamount Hospital where Paul Alford was paid €13 a week. Some of his co workers were getting €3 a week.
John McManus, writing in today’s Irish Times, (Sub. required) warns that Dublin’s IFSC is in danger of becoming a financial El Paso. Too late, John, the centre is already well known as the ‘Wild West’ of European finance.
With major understatement, he describes the €17.3 billion hit on a German bank that originated from Ireland’s Wild West as
“A little embarrassing.”
Another report by Derek Scally in the same paper is more hard hitting.
It seems that Germany’s financial regulator, BaFin, is under fire for ignoring warnings in a 2005 report by KPMG that SachsenLB’s Dublin subsidiary was involved in some very dodgy ‘financial juggling’.
One financial expert described the Dublin operation as
“A sloppily-run pig sty”.
Mr. Jochen Sanio, head of Germany’s financial regulator is also under pressure to explain his role in the affair. Bet he wishes he was the Irish regulator, who never explains anything.
Germany’s taxpayers will be none too pleased either on hearing that they will be picking up the €17.3 million tab, essentially, as a result of the ‘anything goes’ attitude of the Irish Financial Regulator.
According to the Irish Financial Regulator one of its main tasks is to –
Help consumers to make informed decisions on their financial affairs in a safe and fair market.
This promise has a hollow ring to it in light of the latest rip off by an Irish bank.
Rip offs by Irish financial institutions have become so common now that when news of the latest ‘overcharging’ by Ulster Bank (2nd item) was reported yesterday, the regulator didn’t even bother to make comment.
Over the last 15/20 years Irish banks have ‘overcharged’ their customers (victims) by a massive €167 million. Only a fool would believe that these activities are all down to ‘error’ rather than deliberate and well organised scams.
Despite this, not a single bank has ever been punished by the Financial Regulator. Not a single bank official has ever been questioned by the police never mind actually charged with criminal behaviour.
Michael Kilcoyne of the Consumers Association of Ireland suggested that there should be a fine of several million Euro imposed on these organisations. (RTE News, 3rd item) He is obviously unaware that the regulator already has the power to impose a fine of up to €5 million on errant financial institutions. But even this pathetic fine, which equates to about two days profits for the larger banks, has never been imposed by the regulator.
Not only does the regulator refuse to punish banks, it also affords them valuable protection through a policy of total secrecy regarding their many dodgy activities.
Consumers rely solely on the media or whistleblowers for information to help them make informed decisions on their financial affairs in a corrupt and secretive financial market.
Until I read the article below in today’s Irish Times I had never heard of conduit funds. As always, however, when I hear the Central Bank/Financial Regulator refusing to make comment I begin to take notice.
A quick Google search provided a useful definition; essentially, conduit activity is simply a tax avoidance mechanism.
Further research led me to this report in BusinessWeek and finally to an RTE report which tells us that Ormond Quay, the Dublin based investment vehicle whose difficulties caused the near collapse of the state bank of Saxony, made a gross profit of €7.99 million last year but paid only €250 in tax.
Ah yes, Dublin, IFSC, tax avoidance/evasion, financial black holes, invisible/ineffective financial regulator – The New York Times got it right when it described Dublin as the Wild West of European finance.
Interesting to note the Central Bank referring to the Financial Regulator as its ‘regulatory arm’.
As my emphasis in the article points out the Central Bank/Financial Regulator are still maintaining their tradition of buck passing, denial of responsibility and secrecy.
Regulator has no role on ‘conduit’ activity
The Central Bank has said it has no role in the regulation or authorisation of highly leveraged “conduit funds”.
It a statement yesterday it said that its regulatory arm, the Irish Financial Services Regulatory Authority, was not responsible for regulating Ormond Quay or the two other conduit funds managed in Dublin by Sachsen LB Europe.
“In relation to Ormond Quay, this so-called ‘conduit’ activity is not regulated by the regulator,” it said. It added that the regulator’s involvement had been limited to ensuring that the prospectus for one of the funds indicated that it was not regulated by the authority.
The bank refused to comment on how and when it became aware of the problems at Ormond which surfaced over the weekend.
It also refused to say whether it was aware of the extent of this type of unregulated activity taking place out of Dublin or if it was concerned about the health of similar Dublin-based funds.
It would not comment on whether it had contacted any of these funds to establish their potential liabilities.
“As part of our regulatory role, the financial regulator is closely monitoring developments in the market at present. We are maintaining ongoing dialogue with regulated firms, and with other regulators,” it said.
The bank also refused to comment on whether it had become aware of the problems through its role as the regulator of Sachsen LB Europe, which is based in the International Financial Services Centre in Dublin.
The Department of Finance referred questions to the Central Bank.
© 2007 The Irish Times
Ireland’s victory in this year’s Rolex Fastnet Race brought back some memories of the disastrous 1979 race in which 15 people died.
I was on duty in the Communications Centre in the Naval Base at the time and judging from the reports coming in I was very happy to be on terra firma.
At the time the Irish navy had five ships, three ex Royal Navy minesweepers and two of the first generation of Irish designed/built patrol vessels. One of these, the LE Deirdre, was heavily involved in the Fastnet disaster rescue operation.
When the LE Deirdre was commissioned in 1972 she was described as an all weather ship designed to operate far out into the Atlantic in all conditions. Indeed, she spent so much time patrolling the West coast that she was given the nick name, ‘West coast greyhound’.
Incredibly, however, the Deirdre was less safe than Titanic. Titanic was doomed from the moment she struck the iceberg because her so called ‘watertight’ bulkheads were only watertight horizontally. The tops of the bulkheads were open and once she began to go down at the bow the water spilled over the top of each ‘watertight’ compartment in turn, sealing her fate.
But the bulkhead design of Titanic, inadequate as it was, did buy vital time for at least some passengers to save themselves. The Deirdre, on the other hand, had no watertight bulkheads whatsoever and would have gone down like a stone if the hull had suffered even a moderate breach. Its design could be compared to driving a car with no brakes in the hope that they would never be needed.
I served on Deirdre in subsequent years blissfully unaware of its potentially fatal weakness. Sometime during the 1990s she was finally fitted with the necessary watertight bulkheads and in 2001 was sold off for conversion into a luxury charter yacht. I believe she now operates in the calmer and less demanding Mediterranean Sea.
Consultant paediatrician and member of the National Immunisation Advisory Committee, Dr Kevin Connolly has criticised the delay in recommending whether the cervical cancer vaccine Gardasil should be provided under a National Immunisation programme.
The report (5th item) claims that the vaccine coupled with a screening programme could eradicate the disease within a generation.
You would imagine that there could be no objection to such a programme but as always the twin evils of social class and moral righteousness raise their ugly heads.
For those with the money our two tier health system will see their children safe from this deadly disease for a mere €600. Those who cannot afford the vaccine must wait until the Health Information and Quality Authority (HIQA) completes its cost-benefit analysis.
Already the mad mullahs in American and the UK have objected to the vaccine on the grounds that it might promote promiscuity among young girls. No doubt our own home grown religious mullahs are champing at the bit.
What these religious dinosaurs are essentially saying is;
We have no objection to rich people protecting themselves (because we are powerless to stop them) but we are prepared to risk the lives of less well off young women, by putting pressure on governments, in order to protect our moral sensitivities.