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Legal loophole stopping vulture fund mortgage holders going to Ombudsman to close

The Central Bank admitted a “gap” existed which meant some homeowners whose loans are with vulture funds do not have the same rights and protections.

GOVERNMENT HAS MOVED to close a legal loophole which resulted in thousands of people whose mortgages were sold to vulture funds having no access to the State’s financial ombudsman service.

In February, in a heated exchange between Sinn Féin’s Pearse Doherty and the Deputy Governor of the Central Bank Derville Rowland, she confirmed that a “gap” existed which meant some homeowners whose loans are with vulture funds did not have the same rights and protections as others. 

It resulted in complaints over disputes regarding the handling of loans not being dealt with by the ombudsman with mortgage-holders left in limbo as to what course of action to take. 

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The issue related to complaints from a time before the credit ­servicers, who act for the funds, were registered with the Central Bank.

Credit servicers were only required to be registered with the Central Bank since 2019 after earlier legislation was introduced.

The Financial Services and Pensions Ombudsman (FSPO) is an independent and free service that helps resolve complaints from consumers with financial institutions.

Finance Minister Jack Chambers yesterday received government approval for a Committee stage amendment to the Financial Services and Pensions Ombudsman (Amendment) Bill 2023.

This proposed amendment, which was drafted following advice from the Attorney General and consultation with the Office of the Parliamentary Counsel (OPC) and the ombudsman, seeks to close the legal gap.  

Right to protections for all 

A government spokesperson said: “It is important that all residential mortgage holders can avail of consumer protections, including being able to bring a complaint to the FSPO, no matter what the background of their mortgage is or whether their provider was previously unregulated.”

In a statement to The Journal, Doherty said the legal loophole, which he highlighted in February, meant that even if there was wrongdoing or a mortgage holder was mistreated, the ombudsman could not investigate the complaint or require the vulture fund to pay compensation to the consumer for misconduct.

“This is a basic right which every consumer and mortgage holder should have. Access to the Financial Ombudsman is a key part of the consumer protection framework,” he said.

“For years government ministers have claimed that mortgage holders who had their loans sold to vulture funds would keep all and lose none of the consumer protections that they had when their loans were held by retail banks.

“That was not true. In February I made clear to the government that this loophole must be closed.

“I look forward to scrutinising the legislation to ensure that it achieves what I raised in February,” he said.

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    Mute anne leyden
    Favourite anne leyden
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    Jan 15th 2025, 4:53 PM

    What a devastating disaster. To destroy such an old established business like this. Hope ye can stay going and regroup. Nothing sacred anymore.
    Ann

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    Mute Pink Freud
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    Jan 15th 2025, 9:18 PM

    Maybe someone else nearby with a Catering Kitchen could allow her to use their kitchen on a quiet, or a shut shop, day? Esp’ if it has its own “Free Power”/Off-Grid Renewable supply (to keep overheads down – for both parties). A lot of places don’t open on Mondays, Tuesdays, & Wednesdays anymore. If she could still meet even half her clients’ orders that fit with the days she has kitchen access (for retention of freshness), it would give her a fighting chance to keep the business *in business* and ticking over while the Tradies are in the bakery unit restoring and renovating the place…. after the insurance finally inspects & processes whatever payment they intend.

    Also – There should not be any water *still* pouring out into her shop unit. Would the Firefighters not have given her a hand there to find the external stopcock and turn off the mains supply to the store entirely.
    Unless it’s coming from a loft or rooftop storage tank? But even then, it should quit eventually when it runs out of water . . . .unless, again, the mains outside is not turned off and is still supplying the tank.

    We’ll keep the fingers crossed for them anyway.
    Best of luck bouncing back

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    Mute Mies Valkenburg
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    Jan 16th 2025, 5:16 AM

    Hope they’ve got adequate insurance that will cover rebuilding and possibly loss of earnings. Even so, next year’s premium might be off the wall. Hate to see a decent family-run business like that destroyed. Not too many left anymore.

    13
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    Mute Des Daly
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    Jan 15th 2025, 8:50 PM

    Is it possible that the fire could be caused by the ole reliable climate change claim ? Asking for an insurance friend of mine

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    Mute The Hard Road
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    Jan 15th 2025, 3:03 PM

    1862 was a long time ago. Thought it was mostly spuds on the menu then

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    Mute Jack Hayes
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    Jan 15th 2025, 3:11 PM

    @The Hard Road: Is that what you thought? Read much?

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    Mute Tezmond McVicar
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    Jan 15th 2025, 4:28 PM

    @Jack Hayes: Comments section is full of w anchors.

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    Mute The Hard Road
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    Jan 15th 2025, 5:06 PM

    @Jack Hayes: I stand corrected. I had thought there were lots of people subsisting on potatoes rather than cream cakes during that period of Irish history. Now I know better

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    Mute Sea Spirit
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    Jan 15th 2025, 5:25 PM

    @The Hard Road: Like the man in the orthopaedic shoes.

    4
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    Mute Brian Hunt
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    Jan 15th 2025, 7:10 PM

    @The Hard Road: Everything was on the menu then, if you had the wherewithal to pay for it!

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    Mute Pink Freud
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    Jan 15th 2025, 9:08 PM

    @The Hard Road: You are on the right track …-ish. Spuds were never the problem. Wholesale confiscation of all livestock, tillage crops, and grains, by Britain, as “Taxes” surplus to coin taxes and rents, were the problem. All the “tenant” farmer was left with to sustain themselves were usually a few spuds and other scarce bits. Potato crop failed the years of the Famine Genocide, AND Britain still continued to levy and escalate confiscation of all harvests and livestock.

    But you would definitely be correct. Very few indigenous Irish would have had the option or opportunity to eat home made cakes, let alone *purchased* bakery goods from the City. Back then, the shop probably predominantly supplied indigenous Protestants who had favourable access to higher salaried professional occupations and lay jobs; and the non-indigenous, like Brits, who held all the Wealth (from Resource stripping).

    That is not to say there wouldn’t have been a fair few indigenous Catholics who had reasonably well paid jobs and/or happened to have multiple teenage children capable of and succeeding in getting a lower paid City job who’s wages would then all go into the pot for the mother to run the house (and, buy a rare cake on a rare special occasion).

    So it wasn’t wholly impossible for indigenous Irish Catholics to purchase a cake.
    It was just far more probable the Protestant Privileged, and the foreign Resource Strippers, were the more common customer (possibly alongside tea shops and other commercial enterprises that didn’t have an in-house baker)

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    Mute The Hard Road
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    Jan 15th 2025, 10:59 PM

    @Pink Freud: comprehensive and factual answer.

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    Mute Thesaltyurchin
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    Jan 16th 2025, 1:54 PM

    @Pink Freud: Sort of what we have now but with multinationals

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    Mute Paul O'Mahoney
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    Jan 16th 2025, 10:24 AM

    That picture brought me back .Terrible news and places like this are very few nowadays. Some are intent on destruction and for what purpose? I hope they recover. I have a yearning for a jam doughnut now.

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    Mute Thesaltyurchin
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    Jan 16th 2025, 8:05 AM

    Ireland wants a franchise here. Greggs maybe

    1
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    Mute Michael Ward
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    Jan 16th 2025, 11:51 AM

    @Thesaltyurchin: But do we really, you have clearly have not tasted anything from Greggs.

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    Mute Thesaltyurchin
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    Jan 16th 2025, 1:53 PM

    @Michael Ward: Sarcasm. Apologies, it’s a hard one when read in context. But we do prefer our shop owners to run a Centra, our coffee to be Starbucks. Imagine it’s less work for officials to do, bigger employers, lower wages. If a costa goes bust it probably doesn’t even register a blip on their overall books. Ireland has never liked the SME (imo).

    1
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