Michael Collins: Demands probe of rogue financial advisors

Thank you. The role played by some financial advisors at this date needs to be investigated immediately. The issue of financial advisors taking people's money for investments and the client getting no return for that same investment is both a local and national issue. The issue has been aired on RTE on more than one occasion and most recently on RTE's Complaints Bureau show in March, where loan notes were given to clients by financial advisors in return for their money. These loan notes didn't appear to be worthless, even though they are covered by the central bank. Constituents in my constituency and yours and throughout the country have lost millions of euros due to these financial advisors. I will give you one example of dozens that I am aware of. Over 13 years ago, a constituent of mine, while looking for financial advice and clearing their mortgage, was advised by a financial advisor to invest their money with the same advisor, who guaranteed returns to pay back both the mortgage and also make money. This constituent made £40,000 on an initial investment of £50,000. They subsequently reinvested £45,000 plus another £105,000 over a period of time, bringing their total investment up to £200,000. Other family members were encouraged by the financial advisor to invest their money, which they did, and brought the total family investment to £360,000. The financial advisor promised to invest the money in a trusted company. Then, this is where the scam starts. Taoiseach, for this person and so many more, the company goes into liquidation, leaving my constituent and many like them in financial ruin. These same financial advisors didn't go and set up another company and continue to take investments from other innocent, honest people without paying back what they took off previous people. Eleven companies have been set up by this financial advisor to date. The following are samples of the sums of money people have lost. £10,000, £150,000, £350,000, £450,000, £700,000 and many, many similar amounts. My constituent has been looking for their money back since 2021. There have been 3,800 emails back and forth between the financial advisor and the constituent, but no money repaid. Frequently, the financial advisor promises to pay back the money. The scam goes on while these advisors drive around in the same neighbourhood with top-of-the-range range rovers, living lavish lifestyles. Having been given reassurances by the financial advisor that they would get their money back, our constituent went to buy a house only to subsequently advise the money is gone. This had a devastating effect on the constituent who started to conduct their own investigation. They discovered that there are hundreds if not thousands of people in a similar position. The money feel isolated, ashamed and lost as to where to turn it to. My constituent has made a complaint to the ombudsman in June 2024 and is still waiting an outcome. The Garda fraud squad has been notified. Taoiseach, loan notes and companies are being regulated by the central bank, which raises the question. Is the central bank conducting checks on companies and their indemnity? Is the central bank conducting checks on the people who set up these companies? And should the central bank now be responsible for these people's losses? Thank you Deputy Taoiseach. First of all, I thank the Deputy very much for raising the issue, and that is an issue of grave concern to those who have been depleted of the resources. Again what I would say is towards the end you have in some respects provided the answer. I mean, the central bank is responsible for the regulation of financial advisors. I do not know whether this person was registered with the central bank or not in the first instance, maybe you might confirm that in the supplementary question. Because any individual can search the central bank registers to get a list of providers who are operating in Ireland, unauthorised by the central bank, and before anyone makes an investment, they should force check the central bank register. The other key protection is the consumer protection code. The central bank has just finalised a review of consumer protection in Ireland, of the code itself. And again, it will come into effect in 12 months' time, the review will, and again it is about consumer interests, consumer rights, consumer protection. The central bank does issue warning notices, Deputy, on firms who are not authorised to provide such services and more up-to-date information on scams. We also have the Competition and Consumer Protection Commission, which publishes information on how to choose an advisor on the types of services and investments they can provide. And there is a broader issue of financial literacy, because it has amazed me at times how people trust their money with people who wouldn't necessarily have a track record, and they never get their money back. It has always been something that quite amazes me, to be frank, how people, unfortunately, get sort of conned by people of this kind. I am not clear where the financial ombudsman is, you said it had been referred to the ombudsman, and it has also been referred to the En Garde Chicane, and obviously those investigations should happen and should take their course, because that is the right thing to do. And again, as I say, in terms of the central bank, it is responsible, and again, if complaints are made, I think the central bank will be advising people in respect of any particular rogue investor or someone who is scamming people. But above all, ultimately the Garde should investigate, probably are investigating this case, with a view to seeking redress and perhaps dealing with the person involved. Deputy Prime Minister Thank you. The. This scheme by the financial advisors seems similar to the dolphin trust, now known as the German property group, that promised high interest payments on original investors' capital before collapsing, owing 1 billion sterling, catching 1,800 Irish investors for 100 million. million. I raised this issue briefly in the Dáil last week and received an email last night from another investor who now realises he has lost 500,000 euros of money he honestly invested. All this is going on and for years the Central Bank seems to be lying idly by while these advisors drive around the likes of Kinsale, set up business in Carragalline and are getting off scot-free and laughing at how great scam they have pulled off these innocent people. I ask you Taoiseach would you engage with the powers that be in the Central Bank to meet with a number of these innocent investors to see how these scam operators can be weeded out and these investors can have their moneys returned to them. I will indeed, Deputy. Perhaps I might discuss it with you in terms of case studies that you can bring to our attention. I talked to Mr Finance as well. I think he'd be happy to engage because this is awful to happen to anybody. It's the old adage, you know, if it's too good to be true, then it is too good to be true in terms of potential returns from investments. That said, just to say that the Central Bank does publish warning notices for unauthorised firms as well as a list of them. People should only engage with registered brokers. I don't know whether this person was a registered broker or not. There may be an issue of who does the inspections and so on like that. And you've raised the prospect of an inspectorial regime. But fundamentally, the Guardia have to pursue this. Thank you.