This article was originally published by The Business Post.
In August 2015, we were told by the chief executive of PTSB, Jeremy Masding that it was sorry it had screwed 1,374 customers who had been legally entitled to a tracker mortgage but were denied one by PTSB.
To be fair, while Masding arrived into PTSB after it mistreated its tracker customers, he was present when the board of PTSB decided to appeal a landmark High Court ruling over that mistreatment to the Supreme Court.
Last Thursday, on the day Martin Mc Guinness was being buried, the day after a terrorist attack in London and the day the Dublin Bus staff called an all-out strike, the Central Bank released its report on its tracker examination. This report embodies the horrible treatment of customers by multiple lenders over many years, causing great distress and harm to customers.
Some lost their home, others lived on less than they should have, depriving themselves and their children of many things including medical, dental and educational investment.
Some could have traded up, but were paying too much and could not save.
Amazingly, all lenders just happen to have the same interpretation of their contracts and all at the same time. It is a remarkable coincidence really.
The Central Bank’s report is concerning and raises many serious and uncomfortable questions.
Prior to this review, there were 7,100 customers identified as having had a tracker issue. It seems only 1,374 PTSB customers seemed to have had any redress.
It is a disgrace that the others were excluded. It was worrying when such numbers were identified, but a further 9,900 have now been additionally identified as having been screwed.
This report raises many uncomfortable points and questions including:
● The Central Bank notes that it has obligations to make reports where appropriate to An Garda Síochána.
Have any such reports been made?
● The Central Bank also notes that it has the powers to investigate individuals and impose fines of up to €1 million.
Have any such investigations taken place?
● Lenders are required to appoint independent advisers to oversee the conduct of their tracker examination.
It is unknown who these advisers are. Are they independent and do these advisers have any other relationships with these lenders?
● Likewise, the Central Bank has retained Grant Thornton, EY and Oliver Wyman as advisers. Do these firms provide advice to lenders on tracker issues or any issues?
The Central Bank in its report moves to defend its handling of this under its consumer protection mandate.
Over the last number of years, I and others have called for the separation of the consumer protection function from the Central Bank and to amalgamate it with the Financial Service Ombudsman’s office under a new agency with appropriate powers and without conflict.
The Central Bank seems not to understand the fact that there were thousands of tracker issues identified, which they recorded in their report prior to this review in 2015.
This warranted a proper review of this issue which did not happen.
This shattering of trust goes to the core of consumer confidence into banks.
This synchronised behaviour to profit from consumers while forcing them into immense financial pressure reminds us of the culture that was tolerated by regulators.
Those who are affected need support, and the stealth manner by which banks are now announcing their issues with trackers is not appropriate.
There are many good trusted advisers who are specialising in this area.
It is strongly advisable to seek advice when you receive the redress letters from your lender.
The elephant in the room for consumers is the rate that customers are being placed on under the various lenders redress schemes.
This seems to have been endorsed by the Central Bank. I have complained formally to the Central Bank about the rates being selected by banks and they say they are reviewing them.
Some lenders are trying to put affected customers on a rate of 3.7 per cent as the restored tracker rate.
The Central Banks role in allowing such high rates is highly questionable and shows a clear conflict of interest.