Banking industry stealthily fights independent Financial Ombudsman: Anxiety rules…

That everything is hardly back to normal in the financial world, after the credit crisis, is proven by the next article: Financial Ombudsman Wabeke resigns early, out of frustration for being hindered (link in Dutch). It was printed in the Financieel Dagblad (www.fd.nl), the Dutch financial newspaper of May 30^th.

The Dutch Ombudsman Financial Services, Jan Wolter Wabeke, resigned last year from the Financial Complaints Committee ‘Kifid’ out of frustration, because has was hindered by the council and the board of directors of Kifid.

This is found in a letter that the former executive secretary of Kifid wrote to the council of this complaints committee and in conversations from reporters of the Financieel Dagblad with sources around Kifid. In the letter, it was stated that Kifid-director Kees Oosterholt ordered the executive secretary to ‘spy’ on Wabeke, by filtering the email, normal mail and telephone calls that came in for him. One of her tasks was to intercept invitations for meetings, interviews or televised news shows. Oosterholt herewith tried to prevent that Wabeke would receive a ‘too large public profile’ and would express public statements that would annoy the financial sector.

The council of Kifid, which is dominated by banks and insurers, hindered Wabeke by keeping the budget for complaint handling very small. Also members of the council criticized Wabeke ‘of the record’ for his stand in specific files, like the commissions that insurers pay to insurance intermediaries and the so-called “blocking clauses” in insurances.

Wabeke and the secretary, that also resigned at Kifid out of displeasement with the proceeds of council and board of directors, confirm the content of the letter. Further they deny any comments. Wabeke only states that it was not ‘just for the sake of it’ that he urged the Dutch 2^nd Chamber of Parliament to adjust the structure of Kifid. Kifid is now a foundation that is governed and financed by banks, insurers and intermediaries.

The council of Kifid doesn’t deny the existence of the letter. According to new chairman Alfred Hammerstein, the council is in the process of investigating the “justness of complaints of former employees”. Hammerstein adds that the complaints are “no motive for the presumption that the Ombudsman can’t do his job independently and solidly”.

Shortly the ‘Financieel Dagblad’ wrote that ex-Kifid employees heavily criticized the bad functioning of the institute and of Managing Director Oosterholt, who is having ‘a reign of terror’ in the organization. They opinioned that Kifid ‘is fobbing consumers off with fair promises’. A group of Kifid employees resigned after a labor conflict with Oosterholt.

Wabeke already wanted Kifid to be a governmental organ, when it was founded in 2007. The financial lobby, however, obstructed this, afraid as they were that a financial ombudsman would have too much power

What does this story prove?! That the banking and insurance industry doesn’t like an independent mediator, like an ombudsman? And that they will use everything in their power to prevent this independent mediator from gaining too much (negative) attention for the industry?

At least it proves that you can’t leave it to an industry itself to appoint and maintain an independent complaints institute, especially not when so much money is involved as in the banking and insurance industry. The Dutch government would have been wiser to immediately pay attention to Jan Wolter Wabeke in 2007 and not listen too much to the banking world. Of course the credit crisis would not have moved past The Netherlands in 2008. Even when Kifid would have been a totally independent organization, with no strings attached to the banking industry. But Kifid would have been a stronger and more trustworthy institute, than “this club of apparatchiks for the banking industry, with one court jester” is.

Unfortunately these lessons are only learned when the damage is done. And I’m afraid that current politics in The Netherlands is not very much willing to do something about it. In the meantime the public is getting more and more fed up with the banking industry and does not trust any banker whatsoever. On the other hand anxiety rules under the bankers themselves. This might prove an unsustainable situation, amidst the last spasms of the credit crisis.