Lender tried to exclude tracker customers from redress – ombudsman

Finance Committee hears Financial Services Ombudsman dealing with 400 tracker complaints

The Central Bank is overseeing an  investigation into how lenders wrongly denied tracker rates to certain mortgage customers. Photograph: Matt Kavanagh

The Central Bank is overseeing an investigation into how lenders wrongly denied tracker rates to certain mortgage customers. Photograph: Matt Kavanagh

 

At least one bank sought to exclude customers who complained to the Financial Services Ombudsman from the Central Bank’s tracker mortgage redress review, TDs and Senators have been told.

Appearing before the Joint Committee on Finance, Public Expenditure and Reform on Thursday, the ombudsman Ger Deering said he became aware of the attempt to exclude some mortgage holders in early 2016, as a review of the matter got underway.

Mr Deering said he subsequently wrote to the chief executive of all of the State’s banks to say that both he and the Central Bank were of the view that those who complained to the ombudsman should not be treated any differently to other customers, regardless of the outcome of the complaint.

The ombudsman told the committee his bureau was dealing with about 400 complaints relating to tracker mortgages. Most of these, he said, had been put on hold pending the outcome of the Central Bank’s review.

Investigation

The Central Bank is overseeing an industry-wide investigation into how lenders wrongly denied tracker rates to certain mortgage customers. About 100 borrowers across various institutions may have lost their homes as a result of the tracker scandal, with up to 15,000 mortgage holders across a number of existing and former providers in the Republic overcharged.

The regulator’s ongoing review, involving 15 lenders, is expect to conclude by mid-2017.

Mr Deering said he would welcome an extension to the six-year time limit for making complaints, as is set out in the current legislation.

“Such an extension could be particularly beneficial in respect of complaints relating to mortgages of financial products with a medium to long-term lifespan,” he said.

He added that there are a number of potential complaints that may arise following the completion of the review, which his bureau may have to deal with. These could include complaints that consumers were not returned to a tracker mortgage, or if they were, could not avail of the same rate.

Mr Deering said his bureau had dealt with about 1,600 complaints relating to tracker mortgages from 2009 onwards and had received 27 complaints so far this year.

“I think there’s been problems across almost all the banks. Their approach has improved, but looking back, it was a case of what is the least we can get away with to get the ombudsman off our back. Banks shouldn’t have had to wait for a complaint to happen before they address, and what we expect is that where we point out that something is wrong, they would correct it for all customers, not just the one affected by a particular finding,” he said.

Improved attitude

Mr Deering said that while the banks’ attitude towards their customers had improved somewhat, some were still dragging their heels when it came to responding to complaints.

“There has been a change of culture though. We had to work with the banks to bring this about because previously there was almost a handing over of complaints in the past and we had to remind them that it was their customers we were dealing with.

“There’s a noticeable change in the way banks are dealing with customers now and we’re trying to help them move to the next step, which is to deal with the issue directly before it moves up to us,” he added.