Monday 24 October 2016

Banks refuse to return owners to trackers after switching

Calls for tougher stance as lenders dig their heels in

Published 01/07/2016 | 02:30

Ombudsman Ger Deering Picture: Patrick Browne
Ombudsman Ger Deering Picture: Patrick Browne

Banks are refusing to put homeowners back on tracker rates, even after admitting they were in the wrong - sparking calls for regulators to come down harder.

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Cases have emerged where banks admitted that mortgage holders should not have lost their trackers. These people have been offered refunds and compensation, but not put back on a tracker rate.

In most cases, they had switched mortgages to another bank after being denied the re-instatement of their tracker.

Despite the admissions that they should not have lost their trackers, the homeowners are not being restored to the low-cost rates.

Consumer campaigner and founder Brendan Burgess has called on the Financial Services Ombudsman and the Central Bank to force banks to put consumers back on trackers when they admit they should not have taken them away.

He has come across a number of cases, involving a variety of banks, where people did not get their trackers restored because they had switched lender after losing the tracker.

The Central Bank has ordered all banks to conduct a review of their tracker books after Permanent TSB admitted it had taken good-value trackers off 1,400 customers who should not have lost them.

The Central Bank is also taking enforcement action against Permanent TSB and Ulster Bank over their failure to put customers who fixed for a period back on their trackers.


Mr Burgess highlighted the case of Kerry teacher Paul Favier, who was told by Permanent TSB he should not have lost his tracker. Mr Favier had switched mortgage provider in the meantime.

"They did not offer him his tracker back. Lenders who took trackers from people should automatically put them back on trackers. They should not have to appeal the decision," Mr Burgess said.

He claimed the Financial Services Ombudsman (FSO) has not ordered the reinstatement of trackers when it found people should not have lost them.

However, Ombudsman Ger Deering said his office often orders banks to restore customers to tracker rates.

"The FSO has and will continue to direct that tracker mortgages be reinstated in appropriate circumstances," he said.

An internal Ulster Bank email between senior bank officials, highlighted by RTE's 'Prime Time' last night, showed the bank felt paying compensation awards by the ombudsman was a cheaper option than restoring people to their tracker s.

Mr Deering said he could not comment on individual complaints, but he added that if the tracker mortgage customer had switched to another lender, then "a range of other complicating factors may well be present which would need to be considered".

He said that he sent a "very strong message" to banks when he met them earlier this year.

"[I] made it clear that we had put in place a new dispute resolution model that I wanted them to engage with," he said.

"I also made it very clear that I have very substantial powers and I won't be found wanting in using them."

"I will certainly advise any bank or financial institution not to gamble with the Ombudsman or not to try and game the system," he added.

A Permanent TSB spokesman said it had already facilitated customers to move mortgages back to PTSB.

The Central Bank said that it was engaging closely with banks, consumer groups and th e FSO to resolve tracker-loss issues.

Irish Independent

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