Friday 1 July 2016

New hope for thousands of homeowners as tracker probe is widened

Published 19/10/2015 | 08:52

Banks have been, and continue to be, desperate to strip homeowners of their valuable tracker mortgages.
Banks have been, and continue to be, desperate to strip homeowners of their valuable tracker mortgages.

THOUSANDS of homeowners bare in line to get valuable tracker mortgages back as a second State body is probing the growing scandal.

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The Financial Services Ombudsman’s office is now reviewing all of the decisions it made in the past five years, when homeowners took complaints to it after losing tracker mortgages, the Irish Independent has learned.

The Central Bank is already investigating all the lenders in the market over taking trackers from people, and the review by the ombudsman will feed into this.

Some 500 tracker-complaint cases are now being pored over by the ombudsman’s office to see if homeowners lost out.

The existence of the two probes means that thousands of people could have trackers restored and get compensation.

It comes in light of criticism of the ombudsman’s office for its handling of tracker-removal cases. The ombudsman’s office upheld just 17pc of tracker complaints over the past five years.

During the worst of the downturn, banks had refused to put homeowners back on trackers if they opted for a fixed rate for a short period.

At a time when European Central Bank interest rates were rising, thousands opted to fix, thinking they would revert back to trackers.

But instead when they came off the fixed rate they were put on variable rates. Variable rates are four times higher than tracker rates.

Up to 10,000 homeowners may be affected by banks refusing to restore their trackers.

The scandal came to a head this summer when Permanent TSB decided to stop a Supreme Court challenge to a decision originally made by the financial services ombudsman to restore a number of families to trackers.

Read more: Banks have had their way for too long - it's time to put manners on them

Permanent TSB decided instead to restore almost 1,400 customers to trackers and has set up a redress scheme to compensate them.

Financial adviser Padraic Kissane, who specialises in helping customers get trackers back, said banks that refused to put people back on trackers

after they fixed were in breach of Central Bank rules.

“The floodgates will open with thousands of people having trackers restored and getting compensation,” he predicted.

Financial Services Ombudsman Ger Deering told the Irish Independent he has now decided to look back at 500 tracker determinations made

by his office since 2009.

“The review will look at tracker complaints we rejected and ones we upheld. The purpose is to get a sense of the various issues around trackers

and look at the quality of our decision making.”

Mr Deering said that so far one in 10 of the tracker complaint decisions that have been examined are a cause for concern.

“We have identified 10pc of cases that we are looking at in greater depth.”

Some 100 Permanent TSB tracker complaints to his office are on hold, pending that bank’s redress scheme and review of the issue.

Mr Deering said that of the tracker cases it has determined in the last five years, just 17pc were upheld in consumers’ favour. Some 9pc were partially upheld, but 74pc rejected.

He said any issues that arise will be passed on to the Central Bank as part of its industry-wide probe into banks refusing to restore homeowners to valuable trackers.

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