Name and shame powers for Ombudsman
Finance houses face a new three strikes and you are out policy under new rules allowing a watchdog to name and shame.
The Financial Services Ombudsman (FSO) has been given powers to identify banks, insurance firms and investment companies that have at least three complaints upheld against them.
A spokesman for the FSO said the new law, due to come into force on September 1, will make companies learn from past grievances and improve services for customers.
"Ideally, this new legislation will serve both consumers and the industry, and work to both parties' benefit," the spokesman said.
"This is a chance for everyone to make sure that they are dealing with consumers properly and heeding lessons from past complaints. That way they can avoid being named and shamed publicly."
Ombudsman Bill Prasifka confirmed he will publish his first report containing details of the outed companies in early 2014.
Until now, his office has published reports every six months outlining different types of complaints and which sectors they were aimed at.
It has never publicly identified the offending organisation.
The FSO has been calling for the ability to name and shame "for a long time".
Finance Minister Michael Noonan signed the new law into the Central Bank (Supervision and Enforcement) Act today.
This follows lengthy consultation with the ombudsman during the legislation's passage through Parliament.
"This additional provision will mean that financial service providers who are failing their customers will be publicly identified and incentivised to make real improvements," Mr Noonan said.
Customers with a gripe against a company are required to make a complaint through the organisation's own internal process.
It is only when the customer has been unable to resolve the issue directly with the company in question that they can approach the FSO with their complaint.
It is then that the Ombudsman acts as a mediator between the customer and the institution.
If they are unable to reach a solution between them, the FSO launches an investigation into the complaint.
"Once we have collected enough information on the situation, we are in a position to determine whether the complaint in question should be upheld," the spokesman said.
A complaint through the FSO can be upheld, not upheld, or partly upheld.
Complaints that are either upheld or partly upheld constitute as a strike - after three strikes, the company is named.
The FSO's latest biannual report, published last week, showed 4,676 complaints were made to the office during the first half of 2013 - up 27% from the same time last year.
Just over a fifth of those complaints were settled between the consumer and the financial institutions - without the need for "full adjudication" from the FSO.
Insurance complaints made up 50% of all complaints made to the FSO. Banking gripes made up 36% of the complaints, and the remainder were directed towards investment.