Time for proper probe of the tracker trickery of the banks
Published 06/09/2015 | 02:30
There is only one way to clear up the issue of claims and counter-claims being made by those who lost tracker mortgages over the last few years.
That is for the Central Bank to instigate a comprehensive investigation into the issue.
Banks have been, and continue to be, desperate to strip homeowners of their valuable tracker mortgages. They have been using all means, allegedly both fair and foul, to get what they want.
Permanent TSB has been forced, finally, to admit that it wrongly denied almost 1,400 homeowners the return of their trackers after they had fixed rates for a while.
A leading expert on trackers has estimated that AIB is now facing the prospect of having to restore thousands of mortgage holders to tracker rates.
Financial expert Padraic Kissane, who specialises in tracker restoration cases, said AIB has around 3,000 customers wrongly denied a tracker after a period on a fixed rate.
He has met AIB boss Bernard Byrne, outlining the scale of the problem at the bank.
Mr Kissane, who has worked on tracker cases for six years, is currently doing a report for the Central Bank on disputed tracker cases at all the banks, and works with lenders as well as homeowners.
He said the AIB customers fixed their mortgages for a defined period but when that period expired, they were denied their right to return to a valuable tracker product.
Trackers, which have an interest rate that is a set margin over the European Central Bank (ECB) benchmark interest rate, have proved incredibly valuable in the last five years as the ECB dropped interest rates to record lows.
The gap between the cost of a tracker mortgage and a mortgage on a standard variable interest rate is as much as €5,000 a year.
Banks gave out trackers from 2001, and could finance them because funding was cheap. Now funding is more expensive while tracker mortgages are for 20 or 30 years.
No wonder Bank of Ireland is the latest to try to tempt customers off trackers.
The bank sent letters to customers with tracker mortgages, telling them about fixed rates.
The letter makes no mention of the cost and implications of giving up a tracker. This is in direct contravention of Central Bank directions to banks.
What is needed now is a proper probe of all the banks to settle the matter where there are accusations of people losing trackers who should not have lost them.
It is time for the Central Bank to become proactive, and not inert when it comes to consumer issues.
Sunday Indo Business