Tuesday 22 October 2019

Charlie Weston: 'Tracker redress scheme far from finished, contrary to what banks would have us believe'

The latest update from the Central Bank shows that there are now close to 40,000 mortgage holders who are victims of the scandal. (Stock picture)
The latest update from the Central Bank shows that there are now close to 40,000 mortgage holders who are victims of the scandal. (Stock picture)
Charlie Weston

Charlie Weston

The banks would have us believe that the tracker mortgage scandal is nearing an end. Don't believe it for a minute. The tracker mortgage rip-off story was first broken by yours truly just short of a decade ago. Given the way some of the cases are being handled it has a year or two to go yet.

The latest update from the Central Bank shows that there are now close to 40,000 mortgage holders who are victims of the scam.

There has been a rise of around 1,400 in the cases conceded by the banks since the summer. Up to the end of last year, lenders had paid out €647m to customers affected by their failure to ensure people did not lose valuable tracker mortgages. More than 100 mortgage holders lost their homes after banks illegally denied them trackers.

The Central Bank has warned that more customers are likely to be included in the probe of 15 lenders for taking trackers off customers. And the Central Bank will continue to challenge all lenders until it is satisfied that all groups of affected customers have been identified, it said.

But it may take the intervention of the Financial Services Ombudsman or the High Court to ensure all affected customers are properly redressed.

Remember that the Central Bank had to be bounced into taking the tracker scandal seriously by the Finance Minister Paschal Donohoe and the John McGuinness-chaired Oireachtas Finance Committee.

Up to then the probe ordered by regulators of the mortgage books of 15 lenders was producing little return. The probe is the largest conducted by the Central Bank. It has been going on for three years now, and has cost the banks €1bn. It is expected to finish this year, the Central Bank says.

The banks might be hoping that the redress and compensation payments are largely complete. The Central Bank might be hoping that they are largely complete. But they are not, according to consumer advocate Brendan Burgess.

He points out that almost 6,000 AIB customers, who got a pitiful offer of €1,615 for the bank's failure to offer them a tracker when their fixed rate expired, could end up getting average refunds of €30,000 if they win a planned High Court challenge.

Thousands of Ulster Bank customers who switched from Ulster Bank to another lender have received a refund of the overcharge only for the period up to the date they switched. They are entitled to apply for a refund of the difference between what they paid the new lender and what they would have paid Ulster Bank.

The Central Bank should direct Ulster Bank to restore all these customers to their trackers and to have no time limit.

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