PTSB takes legal challenge over ombudsman tracker decision

Industry observers speculate outcome may set precedent for wider group of borrowers

PTSB: “We are seeking a review of one decision which the Financial Services and Pensions Ombudsman made recently in respect of a complaint about a tracker mortgage issue.” Photograph: Alan Betson

Permanent TSB (PTSB) has brought a High Court challenge against a Financial Services and Pensions Ombudsman (FSPO) decision to include a bank customer for tracker-mortgage compensation, after being disregarded in an industry-wide examination overseen by the Central Bank.

While the details of the case are not known, industry observers speculate it may set a precedent for a wider group of borrowers. Other wise, the bank would be unlikely to expose itself to the cost and negative publicity of going down the legal route in this instance, they said.

PTSB, advised by law firm A&L Goodbody, lodged its action on Tuesday, according to court filings. The case is up for mention in court in January.

A spokeswoman for the bank, which was fined €21 million in 2019 for its role in the industry-wide tracker mortgage scandal, confirmed that the challenge relates to an FSPO tracker-mortgage decision.


“Permanent TSB fully respects the office of the FSPO. We are seeking a review of one decision which the FSPO made recently in respect of a complaint about a tracker mortgage issue,” she said. “The circumstances of the complaint now adjudicated upon by the FSPO were assessed under the terms of Permanent TSB’s Tracker Mortgages Examination and the account was deemed not impacted by any tracker mortgage issues.”

Overcharging debacle

The tracker mortgage examination refers to a Central Bank-overseen process between 2015 and 2019 where PTSB and other lenders went through their files to find cases where borrowers were affected by the industry-wide overcharging debacle going back to 2008.

Lenders admitted as part of the review to denying more than 41,000 borrowers their right to a cheap mortgage linked to the main European Central Bank rate – or putting them on the wrong rate entirely. Close to €750 million has been paid out by the industry in refunds and compensation to affected borrowers.

The focus has since shifted to the FSPO, Ger Deering, who has been dealing with complaints from borrowers not satisfied with the outcome of the Central Bank-overseen examination. The Central Bank has repeatedly said that if the FSPO finds in favour of an individual who makes a complaint, the lender must apply this to other customers in the same category.

Exiting market

Ulster Bank, which is exiting the Irish market, launched three High Court cases in recent months against the FSPO. They relate to customers who were on variable home loan rates but took up an option in the mid-2000s to move to a tracker rate, after signing up to so-called flexible mortgage transfer forms.

Each of the borrowers subsequently moved on to fixed rates for periods as the European Central Bank was hiking rates. However, when the fixed periods came to an end, the borrowers were put back on variable rates. The ombudsman decided in each case that the homeowners had an entitlement to return to a tracker rate, as they were never informed on signing a fixed-rate authority transfer form that this right would be lost.

The Ulster Bank cases, which are believed to have ramifications for a wider group of 300-400 borrowers, are due for mention in the High Court next Monday.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times