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Bank pays €22k to man after overcharging on mortgage for almost nine years

Some 1,200 tracker mortgage complaints are still awaiting a decision from the financial services and pensions ombudsman.

Image: Shutterstock/Sichon

THE FINANCIAL WATCHDOG ordered a bank to pay €22,000 in compensation to a man who was overcharged on his mortgage for almost nine years. 

The man, who had become a single parent following the death of his wife, was paying between €200 and €800 a month more than he should have been on his mortgage during the nine-year period.

His case is one of 180 legally binding decisions issued between January and May 2020 by the Financial Services and Pensions Ombudsman (FSPO). 

In this instance, the man’s complaint related to two of four mortgage accounts he held with the bank – one on his home and the other on a buy-to-let property. 

The mortgages in question were considered in the course of the Tracker Mortgage Examination directed by the Central Bank which found more than 40,000 customers were overcharged as a result of the scandal. The Ombudsman said it is still working through some 1,200 tracker mortgage complaints at present.

The digest of legally binding decisions – covering the first five months of the year – states the man, identified as Emmet, had been charged an incorrect interest rate on his two mortgage loans between November 2008 and November 2017.

The bank restored a tracker rate to the mortgage accounts and made offers of redress and compensation totalling €55,075.93. In 2018, Emmet appealed the redress and compensation, seeking €25,000 compensation in respect of “stress and anxiety” suffered by him.

Emmet’s wife died in 2008 and he became the sole parent to his children. He detailed that this was a “very distressing and worrying” time. 

The Ombudsman upheld the complaint and directed that the bank pay a sum of €22,000 compensation to Emmet (inclusive of the €10,227.03 compensation already paid).

“During this nine-year period, Emmet’s personal circumstances had changed significantly and the Ombudsman found that the unavailability of sums rising from €200 up to €800 on a monthly basis over a near nine-year period, was a source of great inconvenience to Emmet and his family. The Ombudsman found it extraordinary that the bank had stated that it did not believe that Emmet demonstrated any inconvenience in the particular circumstances of this complaint,” the report states. 

Ombudsman Ger Deering said he believes some 7,000 will benefit from the decisions handed down by the financial watchdog. 

“Increasingly, providers are applying my decisions to groups of customers who are in similar circumstances to those who have received decisions from the FSPO, even if they have not themselves made complaints to the FSPO. 

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“This is particularly evident from decisions I have made in a number of complaints relating to tracker mortgage complaints. It is my understanding that almost 7,000 customers across a number of banks will benefit from the directions I have made in a small number of decisions. There have also been other decisions that have caused providers to apply remedies or change practices to the benefit of a wider group of customers.”

Deering also expressed concern about the recurring issue of credit profiles, particularly, circumstances where inaccurate or incorrect information has been added to a customer’s profile. 

“The incorrect reporting of a person’s credit profile can have serious implications, including the refusal of credit. While errors can occur, it is evident from some of the complaints we have received that such situations have been exacerbated by the failure of the providers to rectify the error,” Deering said. 

“I would ask providers to be careful in their reporting and to remedy mistakes quickly. Consumers should also be aware that such reporting takes place, and inform themselves about what information is held about them on credit databases.”

Speaking on RTÉ’s Morning Ireland, Deering noted that his office has received some 250 Covid-19 related complaints so far, relating mostly to business interruption and bank loans. 

“Like everybody I think banks and financial institutions are finding the Covid situation difficult to deal with. But I would encourage them to continue to communicate.”

About the author:

Adam Daly

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