Surge in tracker mortgage decisions expected by ombudsman

Financial services and pensions ombudsman Ger Deering said he expected to issue "a considerable number" of decisions on tracker-mortgage complaints in the coming weeks, as the focus shifted to his office after the Central Bank issued its final report on the matter.

The ombudsman was dealing with 1,174 tracker complaints at the end of last month, having received 347 new cases in the first 10 months of the year, Mr Deering told the Oireachtas finance committee.

The cases include AIB customers, who were told that while they were wrongly denied a tracker mortgage more than a decade ago, the "prevailing rate" at the time would have been as high as 7.9 per cent, noted committee member Michael McGrath TD, Fianna Fáil's finance spokesman.

Individuals among 200 Bank of Ireland staff who have argued they are entitled to a tracker rate are also likely to have complaints before the ombudsman, he said.

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Mr Deering recently issued 15 legally binding decisions on tracker complaints – with two of these upheld, two substantially upheld, three partially upheld, and eight rejected – as the ombudsman progressed cases this year that had been paused as the Central Bank carried out an industry-wide examination.

The bank's final report on matter, issued in July, found that 40,100 borrowers had either been wrongly refused a cheap mortgage linked to the European Central Bank rate or put on the wrong rate entirely. It claims that almost half of the cases emerged as a result of it challenging lenders to have them included in compensation programmes, even when banks were standing on strong legal ground.

Refunds and compensation

Mr Deering plans to publish a synopsis on its initial tracker-related decisions in January and follow that up with either quarterly or half-yearly reports.

Central Bank officials told the Oireachtas finance committee last month that banks will be expected to review how they handled various groups of customers if the ombudsman finds against them as it issues decisions on individual complaints. This may result in the industry, which has set aside over €1.1 billion to deal with the fiasco, having to ringfence additional funds for refunds and compensation.

The ombudsman’s office, which has 60 staff, is working very closely with the Central Bank and will highlight cases that may have a wider application.

Mr Deering said while his organisation aims to resolve complaints in dispute through mediation within three months, it can take 12-18 months to fully investigate contested cases, given problems it is having in a buoyant economy recruiting and holding on to staff.

Mr Deering said that his office has identified 18 insurance-premium cases which may fall into the so-called dual-pricing category, an area that has come under increased political and regulatory focus in recent months. This relates to instances where new customers are given a lower quote than loyal customers who are perceived to be less likely to move to another provider.

The ombudsman can only find against a firm if it is established that its actions were “improperly discriminatory”, he noted.