Way back in 2004, Senator Donie Cassidy tried to start a “name and shame” campaign in the early days of what became known as “rip off Ireland”. If you were ripped off, you only had to name them to Donie, and he’d use Seanad privilege to shame them in the Seanad.
That went nowhere.
Since 2004, I’ve been keeping track of the Irish companies who’ve ripped off their customers by overcharging them in many various and ingenious ways. Last week, I wrote about AIB admitting for the eighth time that they’d stolen money from their customers in the past 6 years.
That’s them admitting to having unjustly taken nearly €34m from over 250,000 of their customers – an average of about €137.50 each. Handy money if you can get it (or more importantly if you’re bank is AIB, actually keep it).
It’d make you wonder:
1. What might be going on that we should know about but still isn’t being admitted to?
2. Why does AIB still 4m customers when so many of them are being treated this badly?
I’m focusing more on point number 2 here, and I’m a little perplexed.
I’ve been a persistent critic of the Financial Services Ombudsman who has steadfastly refused to “name and shame” financial institutions against which he makes findings.
My hope has always been that by naming and shaming, consumers would know who the transgressors are, and can then make conscious decisions to take their business elsewhere. So, if you know that financial institution x has been found to have misold a financial product to an unsuitable client, you can make your own decision to avoid that institution if you’re looking to do a similar kind of business.
But AIB has been named and shamed 8 times in 6 years for stealing money from their customers accounts (not to mention the balls they’ve made of their involvement in the property market in Ireland), but they still have 4m customers.
How can that be? Do people never learn?
Which brings me to this, from the Guardian:
There’s no point naming and shaming the banks. They have no shame
In an article from Patrick Collinson back in September, he leads with “Naming and shaming bad banks will never work. What we need is tougher regulation”.
When it comes to dealing with AIB for example, it seems we can have all the naming and shaming in the public domain that we could care to see, yet consumers aren’t learning their lessons – they’re remaining customers of the bank.
Who’s fault is it then, further down the road, if AIB dips back into their customers savings or current account for a few more quid? It’s not like they don’t need the extra cash at the moment.
Yes, obviously it’s the banks fault, but how much is the customer to blame, given they have full knowledge that having done this in the past, it’s possible that they may do it again.
Where does the Financial Regulator fit in here though? They can inform consumers – but consumers are informed now, but just not listening.
All that’s left, it seems, for Ireland as well as suggested by Mr. Collinson for the UK, “The alternative, which the financial services industry has fought tooth and nail against for years, is direct product and price regulation.”
So, more regulation. As Mr. Collinson closes, “The banks can’t be shamed into action. Instead they will have to be kicked”.
Unfortunately, as we’re seeing here in Ireland at the moment, our financial regulation has been named and shamed in its own right for recent disastrous activities, so we probably can rule out any new protections for consumers when it comes to overcharging in the near future.