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Tracker Scandal

Banks use time limit to challenge tracker mortgage complaints to Ombudsman

Ombudsman Ger Deering said up to 500 customers could be affected by these challenges.

LENDERS ARE ARGUING some customers who have made complaints to the Financial Services Ombudsman, believing they are affected by the tracker mortgage scandal, have left it too late.

A Central Bank examination of lender conduct in relation to tracker mortgages in Ireland found more than 40,000 customers were overcharged as a result of the scandal.

The Financial Services Ombudsman put its own investigations of tracker mortgage complaints on hold until this larger examination concluded in July this year.

Now ombudsman Ger Deering has said some banks are contesting investigations, claiming the complaints fall outside the legal six-year time limit.

“What the Central Bank did was work across cohorts of people, as you would expect they would. My office deals with individual complaints,” Deering told RTÉ’s Morning Ireland today.

So we’re looking at individuals, and within cohorts, there can be people who have a particular set of circumstances that may differentiate them, and may in fact, mean that they’re entitled to a tracker mortgage that they didn’t get through the examination.

“Equally, there are people who have been bought back on the tracker mortgage, but they would have an argument that it is at the wrong rate, or just from the wrong time, or indeed there are people who feel the compensation they have been offered wasn’t sufficient.”

His office is currently dealing with 1,200 complaints. He said the office is reviewing 100 of those after challenges from lenders in relation to the time limit but he believes there are 400 other complaints that will also need a review.

Deering said the Oireachtas made a legislative change in 2017 known which also introduced a “date of knowledge” limit. This means in addition to the six-year period from the date of the conduct, there is also the possibility of a customer making a complaint within three years of them becoming aware of alleged misconduct.

He said the “sad irony” is that some lenders are using this clause, which was designed to help consumers, to argue against the investigation of these complaints.

Some of the customers involved contacted their banks years ago to say they believed they should be on a tracker mortgage – their banks are now arguing they were aware of the misconduct at this time and could have made a complaint then.

Deering said not all banks are refusing to accept the complaints, but there are a number of lenders who are using this time limit to challenge them. He said he was not in a position to name these lenders.

Fianna Fáil spokesperson on finance Michael McGrath said the banks challenging these complaints should lift their objections and allow them to be assessed.

“The tracker mortgage scandal has caused immeasurable pain and suffering to tens of thousands of customers and was entirely of the banks’ own making. The fact that some banks are now trying to prevent the Ombudsman from assessing complaints relating to the scandal completely undermines their argument that the culture within the banking system has changed,” he said.

McGrath said he has written to the Central Bank in relation to this issue and he has asked the Oireachtas Finance Committee to contact all lenders involved to confirm whether they are seeking to block the Ombudsman from dealing with these cases.

“The ombudsman has said not all banks are adopting this tactic of obstruction. We need to hear from the individual banks now whether or not they are seeking to block the Ombudsman dealing with some tracker complaints.

We also need to hear from the Minister for Finance that he objects to the banks adopting this strategy.

“This strategy of seeking to prevent cases being examined will inevitably cause further damage to the banking system at a time when it badly needs to rebuild public trust and confidence. The best way of dealing with this now is for all lenders to make a public statement that they will not seek to block the Ombudsman from assessing any complaints relating to the tracker mortgage scandal”.

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