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Monday 11 December 2023 Dublin: 10°C
tracker mortgage scandal

Lenders expected to row back after rebuke from ombudsman over tracker mortgage complaints

Ger Deering this week revealed 500 complaints could be impacted by banks’ use of time limit clauses.

BANKS SUBJECT TO the investigation of tracker mortgage complaints are now expected to row back on their planned challenges after a public rebuke by the country’s financial services watchdog.

Earlier this week Financial Services and Pensions Ombudsman (FSPO) Ger Deering revealed a number of lenders were arguing that his office should not investigate certain complaints about tracker mortgages because the consumers had waited too long to make them. 

The Central Bank examination of tracker mortgages found more than 40,000 customers were impacted by the overcharging scandal – in the worst cases people lost their homes because of their lenders’ failings.

Deering told Fianna Fáil TD Michael McGrath in response to a parliamentary question that some lenders – though not all – were “rigorously challenging the jurisdiction of this office to deal with complaints where there is a question in relation to whether the complaint was made outside the time limits”. 

He said his office in these cases can end up spending as much time dealing with assessments in relation to time limits as it would conducting a full, formal investigation of the merits of that complaint.

Deering told RTÉ’s Morning Ireland that these challenges could impact on as many as 500 complaints. has asked the country’s main lenders whether they were challenging the FSPO’s jurisdiction to investigate these complaints. 

A Bank of Ireland spokesperson said the bank had never sought to apply any time restriction in relation to customers who were deemed impacted by the scandal under the Central Bank examination. 

However, it did “refer a small number of non-impacted customer cases to the FSPO for consideration in relation to timeframe”. 

So-called “non-impacted” customers are those whose accounts would have been examined by their lenders as part of the wider examination. The lenders in these cases do not believe the account was impacted by overcharging. 

The customer has the option of an internal review of this decision and then, after they have complained to the FSPO, another review by the lender which also involves mediation. 

Bank of Ireland said it had raised the issue of the time limit “following full engagement with the FSPO’s complaints resolution mechanism and mediation service”. 

“If that process concludes without resolution, the FSPO will ask the bank if the complaint is within the time limits which are set out in legislation,” the spokesperson said.

“It is at this point having gone through the review process as above that the bank has confirmed to the FSPO that the complaint does not fall within the time limit as set out by legislation.”

Bank of Ireland told it has now “taken on board feedback” from Deering and reviewed its approach to these complaints. 

“We have confirmed to the ombudsman that we are happy that they don’t apply a time limit to any tracker mortgage related complaints.”

AIB said it respects that the ombudsman has the sole jurisdiction to decide which cases are within its remit for investigation and will not be seeking the application of time restrictions in these cases.

Ulster Bank said it has never challenged the jurisdiction of the ombudsman’s office in relation to time limits on tracker mortgage complaints. 

A spokesperson for Permanent TSB explained that in cases where a bank argues a claim is out of time, it is up to the FSPO – rather than the lender – to decide whether or not this is the case. However he added that PTSB has not raised the time limit in respect of any complaints to the ombudsman. 

AAC Loan Management confirmed it has no cases with the ombudsman’s office.

While the majority of lenders denied challenging the FSPO investigations or said they would not be challenging them from now on, others provided less clarity on their position. 

KBC said it is “determined to secure the best outcomes for all customers impacted by the tracker examination”.

“The application of any aspect of the relevant legislation relating to customer complaints rests with the office of the FSPO and we work openly and constructively with them.”

Danske Bank told that all of its complaints “are dealt with on an individual basis and we cannot comment on individual cases”.

The legislation that applies in these cases is the Financial Services and Pensions Ombudsman Act 2017. 

The section that deals with time limits states that a complaint must be made within whichever of the following periods is the last to expire:

  • Six years from the date of the conduct giving rise to the complaint;
  • Three years from the date on which the complainant became aware or ought reasonably to have become aware, of the conduct giving rise to the complaint;
  • Such longer periods as the ombudsman may allow where it appears to him that there are reasonable grounds for requiring a longer period, and that it would be just and equitable in all of the circumstances to extend the period.

In his response to Fianna Fáil’s Michael McGrath, Deering said this last clause, which involves the use of his discretion, “cannot be exercised simply because the complaint relates to the application of a tracker interest rate”. 

He said there must be a particular reason why it would be just and equitable in all circumstances to both parties to extend the time. asked the ombudsman’s office whether he was prepared to use this discretionary power in these cases. A spokesperson said each complaint is considered on its own individual circumstance and merits.

However, they said it is possible that there will be complaints among those currently being assessed where it would be just and equitable to extend the time. 

The spokesperson said this power has not been exercised by the FSPO to date. 

[Update 26 August: KBC issued a statement this morning to say it will not challenge time limitations in respect to tracker mortgage complaints and have advised the watchdog of this.]

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