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Sasko Lazarov/Rollingnews.ie

'Someone knew what they were doing': Financial watchdog says tracker mortgage scandal is unacceptable

Ombudsman Ger Deering said his office has seen firsthand the level of hardship people have experienced as they struggle to pay back their debt.

THE FINANCIAL SERVICES Ombudsman has criticised banks which overcharged people on their mortgages and accused them of being more concerned about their profit line than the best interests of their customers.

In an interview with TheJournal.ie, Ger Deering said he can understand the upset and frustration felt by those affected by the scandal, which saw thousands of customers charged higher rates of interest by than they should have been.

It is expected that the Central Bank’s examination of the issue will find as many as 15,000 people were affected.

“This is life changing for some people. It has very serious implications. I think some people may have made personal decisions; it goes from the extreme of people losing their homes, but there are also people who managed somehow to keep the payments up – but at what cost? There would have been other major sacrifices that people would have had to make,” Deering said.

‘A turning point’

Before the scandal came to light, Deering’s office had received a number of individual complaints from members of the public that were connected to it. It was, in fact, a court case taken by Permanent TSB appealing the ombudsman’s decision on four of these complaints that brought it to the attention of the Central Bank.

“I think the High Court case was a turning point where people began to realise, yeah there are others out there with the same problem these people had and the Central Bank got involved at that stage after that High Court case,” he said.

The High Court sided with the ombudsman’s office, and though the bank lodged an appeal in the Supreme Court, it withdrew it in 2015 and set up a redress scheme for the almost 1,400 of its customers it identified as being impacted by this same issue.

Deering decided to conduct a review of the complaints his office had handled in relation to tracker mortgages, which he provided to the Central Bank.

“You’re looking at all these individual cases and it’s only when you join it all up that you can get some sort of a picture,” he said.

‘Their profit line’

When asked how he thought this mass overcharging happened, he said banks did not act in the best interests of their customers.

“I think clearly in this people – and when I talk about people I’m talking about banks – acted in the best interest of their profit line or their losses, reducing their losses or whatever,” he said.

I can’t say, I’ve no evidence to say it was a concerted effort, but certainly there was an attempt to maximise profits or reduce losses, whatever way you want to look at it, by getting the maximum out of people. And it’s unacceptable behaviour and it certainly is outside of the CPC [Consumer Protection Code] where they’re expected to act in the best interest of their customers.

“I can’t really speculate, but somebody knew what they were doing, I mean there were decisions taken on these matters. I don’t know what level they were taken on but certainly on a file by file basis you can see these decisions were taken,” Deering added.

 A number of customers who have been affected by the scandal have spoken in recent months about their frustration at how their bank is treating them. Many feel there has been an unnecessary delay in getting information about how much the bank owes them. Deering said it is a “complex issue and there is not a ‘one size fits all’”.

“I can see from the work that we would do on an individual file, if that has to be replicated in terms of thousands, I can see how it is taking time. That’s not to justify it, but I would rather see it being done in a way that nobody would be missed on this occasion than in a way that maybe is quick,” he said.

I agree that this is a hardship – there’s no doubt this is a hardship for people and the longer it goes on the more hardship it will cause. We would be anxious to see it completed as quickly as possible. That would allow us to move on as well in dealing with the complaints we have here.

Statista Statista

The office of the Financial Services Ombudsman currently has around 450 complaints regarding tracker mortgages, with most of these on hold pending the outcome of the Central Bank’s examination of the scandal.

Deering said he has been closely cooperating with the Central Bank on the issue and described it as ”quite determined”. In response to a recent query from TD Michael McGrath on the issue, the bank said it continues to challenge lenders to ensure the review phase is completed as quickly as possible.

“Lenders are currently at varying stages of their reviews and we continue to challenge them to ensure that deadlines for completion are met,” it said.

‘Absolutely struggling’

In April this year, TheJournal.ie highlighted the case of Kerryman Ray Flavin, who was told by Bank of Ireland that it had been overcharging him on his mortgage repayments. At the time, the bank was attempting to repossess his home and this case is still before the courts.

The ombudsman said he believes banks need to look at cases before the courts if the customers they are pursuing are affected by the scandal.

“Certainly, if the tracker issue has contributed or the bank has contributed in any way to the person being in arrears they would certainly want to consider the situation before taking any legal action or indeed progressing legal action,” he said.

Deering said his office has seen firsthand that many people in this country are “absolutely struggling, in huge difficulty” with debt.

I think there’s a significant number of people who got themselves, unfortunately, into serious difficulty. I don’t blame people, in the sense that houses were that price, there’s a huge home ownership culture in Ireland and it seemed like the right thing to do. Certainly in my lifetime houses only ever went up, nobody ever saw that this crash – well I won’t say nobody, but – people felt ‘I have to get on now, I have to get on the property ladder now’ so I think there was that drive that caused people to do it. We see a lot of hardship in here, we see a lot of people who have serious difficulty and genuine difficulty in trying to pay their loans and their mortgages.

Though he expressed concern at rising property prices, he said he hoped stricter rules on lending could help prevent further hardship in the future.

“I think there are a lot more measures and control in place now. I don’t think people will be able to get loans as easily – I hope people won’t be able to get loans as easily as they were given back at the height of the Celtic Tiger. I don’t see that. I think people are actually finding it difficult so the prices are increasing despite the fact that people are finding it difficult to get mortgages,” he said.

“I hope that the same level of debt difficulty isn’t going to happen again, but I do think there are measures there now that weren’t there before that are likely to help to guard against it.”

If you have been affected by the tracker mortgage scandal, we want to hear your story. Get in touch by sending a message to trackermortgage@thejournal.ie.

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    Mute The Risen
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    Apr 3rd 2017, 10:06 AM

    Anyone else reckon enda has notions of himself still being taoiseach for the Papal visit?

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    Mute Rob Mills
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    Apr 3rd 2017, 2:20 PM

    Enda, who????

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    Mute Rachel Didleu
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    Apr 3rd 2017, 2:57 PM

    @The Risen: as long as its not the 267th pope!

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    Mute Gerry Carroll
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    Apr 3rd 2017, 6:33 PM

    @The Risen: What a bunch of spineless cowards they are in FG. Afraid to be seen as ‘pushing’ endless Enda who’s laughing at them (and us) all. He’s intent on hanging on until he gets his place in history as the longest serving FG Taoiseach.

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    Mute Alois Irlmaier
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    Apr 5th 2017, 12:35 AM

    @The Risen: He can’t wait to kiss the King fisher ring lol.

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    Mute Willy Malone
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    Apr 3rd 2017, 9:56 AM

    Covney , plank.

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    Mute Alan Brogan
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    Apr 3rd 2017, 10:44 AM

    @Willy Malone: wow.

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    Mute Stephen murphy
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    Apr 3rd 2017, 11:05 AM

    @Willy Malone: Coveney, defended the Garda boss and is a supporter of Water Charges. So it looks like Leo, is clear favourite and more suited to FG election chances.

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    Mute Charles Martel
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    Apr 3rd 2017, 11:28 AM

    @Willy Malone:
    Coveney has been groomed by Sutherland for the eventual take-over.
    98% of the people have no idea what’s going on…

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    Mute Louis Jacob
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    Apr 3rd 2017, 11:36 AM

    @Charles Martel: correct… Only in the bubble of the Dublin media is varadker favourite. Stuffy top brass will never let it happen. Coveney a shoe in.

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    Mute William Clay
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    Apr 3rd 2017, 9:57 AM

    So its the summer now, then itll be christmas..
    Hes not going anywhere, he’ll be shaking hands with the pope.
    Sadly we’ll accept it.

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    Mute Garda Daz Topaz
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    Apr 3rd 2017, 10:17 AM

    Failed Health Minister Leo is no leader. Would you want him in the trenches with you in Vietnam? Enda is a liar. Simon Coveney is the minister for homelessness and housing crisis. Another failure. Simon Harris isn a failed health minister who wants out. So who is left? Not Francis Fitzgerald who made a show of herself over Norin and telling the truth. Regina Doherty (breaker of company law) should not be allowed near finances imo. So who is left?? Noonan is under investigation by 4 agencies. Knew about Grace for 20 years. No not good enough. So there is no one really. No leader without baggage.

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    Mute Just Me
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    Apr 3rd 2017, 11:17 AM

    @Garda Daz Topaz: And plenty in the party without a set.

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    Mute James Mc Loughlin
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    Apr 3rd 2017, 10:48 AM

    IT DOSE NOT MATTER WHO IS THE LEADER OF FINE GALE WHEATHER IT BE LEO OR ANYONE ELSE..THEY HAVE FAILED THE PEOPLE AND THEY SHOULD BE PUNISHED FOR THEIR FAILURE

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    Mute Eddie Byrne
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    Apr 3rd 2017, 9:54 AM

    RTE are pushing this issue and its getting very annoying the idiot Kenny thinks he was given a mandate by the people to this term in office as leader. The Muppett will hang on forever because he cant take the hint that he’s not wanted by a vast majority of the electorate.

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    Mute MaryLou(ny)McDonald
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    Apr 3rd 2017, 9:57 AM

    Chickens all of them…

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    Mute Tony Hartigan
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    Apr 3rd 2017, 9:59 AM

    All Fianna Fails doings

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    Mute The Viking
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    Apr 3rd 2017, 9:49 AM

    That Long.. Why wait…!!!

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    Mute Les Behan
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    Apr 3rd 2017, 10:13 AM

    Corrupt politiciaal leader wants to hold on to meet corrupt religious leader.

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    Mute Alois Irlmaier
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    Apr 5th 2017, 12:36 AM

    @Les Behan: George Soros again lol.

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    Mute birdseye
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    Apr 3rd 2017, 10:16 AM

    Say a lot depends on new tds and how long it takes them to be able to claim a pension… why go before that. Delay and put off till that time comes. .then fold. It is Ireland after all

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    Mute Derek Richardson
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    Apr 3rd 2017, 10:17 AM

    Its is a process the same as a snake shedding its skin

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    Mute Deirdre Doherty
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    Apr 3rd 2017, 10:56 AM

    I think endas keeping them all guessing in his own party as well as holding the country to ransom . the country has a housing crisis and house prices are going up no social housing been built at all . hospital waiting list are getting longer doesn’t matter who leader of finna gail all living in a bubble were everything just great . no homeless criss. Nobody’s living in hotel rooms no children living in poverty. No policing scandal s

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    Mute Liz Greer
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    Apr 3rd 2017, 10:52 AM

    Enda thinks he’s God an can’t be done without but there are better people can do the job without the lies

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    Mute Just Me
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    Apr 3rd 2017, 11:22 AM

    @Liz Greer: Agree with your statement, but I don’t think they will be found in FG.

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    Mute The Irish Bull
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    Apr 3rd 2017, 11:26 AM

    Hail Coveney, the Bilderberg candidate.

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    Mute leartius
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    Apr 3rd 2017, 11:41 AM

    The duel is between Leo and Simon. we may see a proper contest, “Could the two contenders please pickup there Ralph Lauren handbags fighting continues until someone breaks a nail”. There’s too little time to get Michael Lowry back into the blueshirt camp before Enda gets the boot, a true FG leader. Michael Martin will still hold power no matter which tool wins the race. Maybe Leo and Simon will form a perfect partnership like Bertie\Cowen or Kenny\Noonan one become Taoiseach while the other plays at being minister for finance. If Irish politics have taught them anything its easier to rob a nation when all rivalry is only for show. Each got the others back during all scandals and crisis’s. Because a new leader of Irish political party does not change how the game is played.

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    Mute john g mcgrath
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    Apr 3rd 2017, 4:11 PM

    @leartius: noonan thinks he’ll live forever Enda thinks he’ll be leader for ever!!!

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    Mute Louis Jacob
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    Apr 3rd 2017, 10:50 AM

    Media playing up varadker’s chances. They are over estimating how far we’ve come. I honestly can’t see top brass in a Christian conservative party like fine Gael allowing a gay man to lead them. I could be wrong but I’d say covney is a shoe in.

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    Mute Adrian
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    Apr 3rd 2017, 12:09 PM

    I’d hope they’d all be gone soon and we might get from somewhere, competent politicians who can do a job and we can be proud of.

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    Mute Adrian
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    Apr 3rd 2017, 12:36 PM

    And whatever time these politicians deem not a good time for an election is probably the best time to have an election.

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    Mute Vincent Sharpe
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    Apr 3rd 2017, 9:55 AM

    More Yawn, Yawn,>>>>>

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    Mute Peadar Ó Gréacháin
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    Apr 3rd 2017, 12:49 PM

    If FF pulled the plug we wouldn’t be having this conversation…..

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    Mute Vincent Sharpe
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    Apr 3rd 2017, 9:54 AM

    Yawn, Yawn, Yawn>>>

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    Mute Scundered
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    Apr 3rd 2017, 11:31 AM

    Every one of them corrupt to the core, stop voting for muppets.

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    Mute @mdmak33
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    Apr 3rd 2017, 1:11 PM

    Public don’t care who is leader of fg,they will suffer in next GE.fg and FF will have less seats.

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    Mute Gus Sheridan
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    Apr 3rd 2017, 2:17 PM

    Enda…just go.

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    Mute Pete Gilmartin
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    Apr 3rd 2017, 1:28 PM

    When is the budget? October? Yep, if Enda goes now then either Coveney or Varadkar will be Taoiseach for 6 months. This government will fall at the budget, no question, it’s the ideal time for FF to pull the plug.

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    Mute marg fitzgerald
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    Apr 3rd 2017, 2:46 PM

    Doesn’t say much for potential leaders that Enda considers them incapable off dealing with any policy matter. Strange that Enda is the best they have to offer… despite all his Sieg Heil to Angela he couldn’t get a Gibraltar type arrangement for the north please FG let him go!!!!

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    Mute Alan Scott
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    Apr 3rd 2017, 10:12 AM

    The Devil you know is better than the one you don’t know

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    Mute Gus Sheridan
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    Apr 3rd 2017, 10:12 PM

    Which summer does he mean?

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    Mute Jlocoroco
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    Apr 3rd 2017, 9:18 PM

    He’ll go once the journal cops on and brings back the red thumbs

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    Mute Tommy_Bannon
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    Apr 3rd 2017, 11:18 AM

    Same shit – different leader.

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    Mute Alois Irlmaier
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    Apr 5th 2017, 12:37 AM

    @Tommy_Bannon: Like Dr. Who, different face same lines lol.

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    Mute Alois Irlmaier
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    Apr 5th 2017, 12:38 AM

    Or lies lol.

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    Mute Micheal S. O' Ceilleachair
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    Apr 3rd 2017, 7:02 PM

    Well it is we the citizens exercise the franchise. The political parties provide the choices. We get what we voted for, no more, no less.

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