High time banks were told to stop bullying customers
We have regulators and we have a Financial Services Ombudsman, but sometimes it feels like the banks still get to dictate the rules.
That conclusion is hard to escape after the emergence of cases in which banks took good value tracker mortgages off people - and acknowledged they were in the wrong - yet refused to restore these people to their trackers.
This stubbornness is happening at a time when all banks have been ordered by the Central Bank to carry out a probe of their mortgage books to examine any cases where mortgage holders lost trackers who should not have lost them.
The probes came after Permanent TSB admitted it had taken good value trackers off 1,400 customers who should not have had them removed. Some people lost their homes as a result.
At the same time, the Central Bank is taking enforcement action against Permanent TSB and Ulster Bank over their failure to put customers who went on a fixed rate for a period back on their trackers.
It is estimated that around 1,000 banking staff are working on the various probes into tracker-loss cases in the banks. Up to 10,000 customers could be affected across all the banks.
Given all of this, it is nothing short of extraordinary that banks are admitting they should not have removed trackers, but still refuse to restore them in cases where people switched their mortgage to another lender.
Banks had been pulling a fast one for years by denying people trackers after they fixed for a while.
When the fixed period was up, they were denied the tracker. Permanent TSB argued that its customers had broken out of the fixed period early.
It is beyond belief banks are now denying people a return to trackers using as an excuse the fact that they moved their mortgage, often in disgust at their treatment.
It is high time the Central Bank and the Financial Services Ombudsman put a stop to this nonsense.
Banks have to be taught to stop bullying people.
Case study: "Not being put back on tracker cost us €30,000"
Teacher Paul Favier reckons his family has lost thousands of euro over the failure of Permanent TSB to restore him to a tracker rate.
He and his wife Corinna, both primary school teachers, ended up switching their mortgage to AIB when they were refused a return to their tracker by Permanent TSB. They had not increased their level of borrowings when switching.
The Kerry couple reckon they have ended up over-paying by around €30,000 over the five to six years that they were denied a tracker. They took out a mortgage with Permanent TSB in 2008, at a time of rising interest rates.
The couple, who are parents to Conall (20 months), fixed their rate for two years. Their offer letter says they would revert to a tracker after the fixed-rate period expired.
“We were supposed to revert to a tracker, but we never did. We were looking for a better rate from Permanent TSB, but we could not get one so we moved to AIB,” Mr Favier said.
He ended up paying a rate of 3.65pc on the AIB mortgage, instead of paying a fraction of that on a tracker rate. When Permanent TSB announced its redress scheme last summer after it admitted wrongfully denying customers a return to their trackers, he contacted the bank.
The bank admitted in writing that he should have been put on a tracker rate when his fixed rate expired. He was offered a refund of €1,400 and compensation of the same amount, but the bank refused to take his mortgage back and put it on a tracker rate. An appeal to Permanent TSB’s consumer appeals panel was unsuccessful. Mr Favier says the bank would not explain its decision. “Not having a tracker makes a huge difference to us. I reckon it cost us €30,000 over the last five to six years of not having it,” Mr Favier said.