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“I DON’T KNOW what a tracker mortgage is.”
Back in 2007 it was a familiar joke based on a TV ad from the Financial Regulator.
Fast-forward ten years and no one is laughing about tracker mortgages anymore.
In fact, more than 20,000 people in this country have been overcharged by their banks since the introduction of this mortgage product back in the 1990s.
A tracker mortgage offers a fixed rate added onto the European Central Bank’s moving interest rate. This product functioned well until the bank crash in 2008 and many customers arranged to move off a tracker and onto either a fixed or variable rate for a period of time.
Now it has emerged that when a large number of these customers tried to switch back to their tracker – something they were fully entitled to do - their banks told them they could not. Thousands of other customers who did actually have a tracker mortgage were charged a higher rate of interest than they should have been paying.
The issue first came under the spotlight back in 2012 when the High Court upheld a decision by the Financial Services Ombudsman in relation to complaints made by two couples who were Permanent TSB customers and who had tracker mortgage issues. The bank launched an appeal to the Supreme Court.
In 2015 it withdrew this and announced it would review another 80 similar complaints. In total, Permanent TSB and Springboard, an offshoot of the bank, paid €43 million in redress and compensation to more than 7,000 impacted customers before the Central Bank announced a market-wide examination.
This happened in October that year. The Central Bank’s review included 15 institutions.
In November 2016, AIB revealed at least 14 people had lost their home because of high tracker rates. The Central Bank also fined Springboard Mortgages €4.5 million for ‘serious failings’ relating to trackers.
In December the Central Bank estimated that just over 8,200 customers were denied the right to, or option of, a tracker mortgage and therefore were overcharged each month by their banks. However, its governor, Philip Lane, acknowledged the final number was likely to be much higher.
Bank of Ireland also revealed that it had identified 602 impacted accounts.
In March 2017, the Central Bank said compensation of €76 million had so far been paid out to impacted customers.
In April 2017, the first customer affected by the scandal went public. TheJournal.ie reported that widowed father-of-five Raymond Flavin was being pursued by Bank of Ireland through the courts – despite the fact that it admitted he was an impacted customer. This case is still before the courts.
This summer victims of the scandal shared their stories and express frustration at the length of time the banks were taking to tell them how much money they were owed and when they would get it back.
In a September interview with TheJournal.ie, the Financial Services Ombudsman criticised financial institutions and said they had acted in the best interest of their profit line – not their customers. However, he said his hands are tied until the Central Bank examination is complete.
Later that month some of the banks updated the Oireachtas Finance Committee about the number of impacted accounts:
Sinn Féin’s Pearse Doherty described what happened with tracker mortgages as “the biggest financial scandal of our time”.
On 12 October, four impacted customers shared their stories with the Finance Committee. Two of these customers have been told by their bank that they are not impacted, but financial advisor Padraig Kissane told the committee that their documentation says otherwise.
Kissane said if everyone who was truly impacted by this error was included in this investigation, the figure would pass 30,000.
Last week the Central Bank provided an update:
The Central Bank said its primary focus in this next phase of the investigation is on customers who were deemed not impacted.
It has already challenged two lenders who it said may have failed to identify populations of impacted customers or failed to recognise certain customers were impacted by their failures. These lenders are due to revert to the Central Bank by the end of this month and the above figures are therefore expected to change.
It is pursuing enforcement investigations into tracker mortgage-related issues arising in PTSB and Ulster Bank and two further investigations into Bank of Ireland and KBC are in train.
Last Thursday, members of the Finance Committee tore into the heads of the Central Bank, accusing them of failing to use their powers to force the banks to pay back the money they took from their customers.
Governor Philip Lane told them he believes there are “substantial numbers” over the 20,100 already identified as impacted accounts.
He also said the regulator has had to “repeatedly challenge” some lenders to engage in the process, correctly identify impacted accounts and fairly compensate customers. He told the committee “we are far from a revolution in how the banks operate”.
We also learned that the Central Bank has met twice with gardaí on the issue, though no formal complaint has been made, and lenders have informally threatened legal action against the regulator in relation to its examination.
“The banks treat you like someone who can be pushed around,” the committee’s chairman John McGuinnesss told them.
On Friday Minister for Finance Paschal Donohoe said he will be meeting with the chief executives of these banks this week. KBC, Bank of Ireland, and PTSB are due in today, followed by Ulster Bank tomorrow and AIB on Wednesday.
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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Is there any doubt that the banks were aware of what they were doing here. If so, why are there no criminals prosecutions ?
@Michael Farrelly: Gardai are examining evidence, apparently.
It would do absolute wonders for ethical standards in Ireland if a few Senior Bankers spent time in Mountjoy.
White collar crime is still crime.
@Michael Farrelly: such a coincidence that all the banks adopted the same, illegal, policy isnt it. If one didnt know better you’d swear they were all in cahoots.
@Brinster: yes apparently examining ? Do you really believe that anything will happen ? It seems very simple though. If you deliberately take money from people under false pretenses, then surely that is stealing and a crime. Why has there been no action on this ?
@Michael Farrelly: Too big to fail. Too big to prosecute.
@Brinster: No arrest warrants issued, very limited search warrants, all of which contributes to a massive amount of time having already elapsed where evidence is likely vanishing into the ether. It’s not even remotely good enough when you consider the infiltrative nature of what are, frankly, cartel levels of collusion within our political sphere.
If we look at recent examples from abroad of how deep this sort of sinister parallel statism can reach we need look no further than Operation Carwash in Brazil. It’s no better here and we lack independent prosecutors that are even capable of leveling actual charges, much less delivering a conviction.
At the end of the day, do you think this would be a conversation if you or me faced this much prima facie evidence of collusive fraud? Does anyone, seriously?
@Michael Farrelly: banks had to of been totally aware or what was happening also what was happening on with the lead up to our so called crash that the tax payer had to fir the cost for, all banks should be fined and mad pay what is owed to Europe and our people and also lock the people up who was involved in it,
There is no doubt but that there has been criminality and that the offence of theft has been committed but there is no prospect whatsoever of a criminal prosecution being taken.
Ireland is a bankocracy, where the banks rule and politicians obey.
This week’s ritualistic “carpeting” of the bankers is just a charade, choreographed and rehearsed.
@Michael Farrelly: off topic ;; i am not sure Nowdays but credit card interest RATES were sheer hell..
@Brinster:
Politicians, AGS and Bankers get special treatment from our two tier “justice” system.
@Michael Farrelly: The sooner the Bitcoin and similar Crypto currencies become the main stream method of peer to peer financial transactions, cutting out the parasitical greedy some corrupt Banksters, and Central banks, the more control the citizens will have over their hard earned money. With no control by Government’s Central Banks, or the Elites who at present control our money and decide policies to create inflation to lesson their huge debts, by devaluing our currencies and printing fiat money. With Crypto’s their would no or very little inflation, a cashless society a digital currency, clean no handling of dirty notes and coins. Governments, Banks, and the money elites who at present control us will fight the mass introduction of Crypto’s in every possible way as they would lose control of the citizens money where they at a whim make it worthless and cause hyperinflation. It is happening in Venezuela at present their currency is worthless, in Germany after WW11 a barrow full of Marks could not buy a loaf of bread. Hopefully Bankers will be an archaic species in the not to distant future and a brave new digital cashless fairer less corrupt financial World will emerge.
Because we don’t do accountability in Ireland.
” it’s a great little country to do business in”. – Enda Kenny.
@Bobby Moore: or as a banker describes it
“It’s a greet country to do little businesses in.”
Stop all bank bonus payments until this is fixed
There’s 360000 on variable rate mortgages, that is set at one of the highest in Europe if not the highest , to pay for the tracker mortgages. And the banks are making 3 times the European average profit , yet the government are only worried about these people now cos it won’t go out of the papers. Maybe if journalists pushed harder and pushed this story it would help a lot of people struggling.
@Mark Sheridan: good point about the potentially beneficial role of journalists in this matter but some journalists have been bought.
@Fiona deFreyne: Would it be worth asking just how many politicians, their families and friends have an interest in these banks? There can be no doubt at this point that the banks have been quite blatantly screwing the Irish people for years – again, as this hasn’t been hidden from the government it’s therefore reasonable to say it has been done with their blessing.
The various government parties colluded with the banks to screw the people, any shock and indignation they’re claiming now can only be acting. The banks MUST be seen to be made to pay full restitution and compensation for all their wrongdoing, no compensation schemes that end up with the tax payer footing the ultimate bill. They got caught doing wrong, they killed people for Christ’s sake, they have to pay for that.
@Mark Sheridan: give us a break IRISH JOURNALISTS do not excist. they appear as guests on chat shows promoting their silly books..
@Fiona deFreyne:
Some politicians have also been bought
They say some things never change but to actually resort to stealing from thousands of families for their hard-earned money every month is beyond despicable. It beggars belief that not only did the banks do this but that they were allowed to by the regulator after everything that happened here. I’m seriously considering moving to somewhere less corrupt like Panama or El Salvador.
@Bingobango: yes. And with the encouragement of Michael Noonan when lobbied by the banks ! And he made sure the The Little People paid for the greed of these W…..s
The amount of widespread institutional criminal behaviour that comes as a surprise to those in authority positions is astounding.
@Felicity Hensen: you will probably find that no ‘actual’ laws were actually broken. Therein lies the problem. And you cannot jail a corporation as it’s just a piece of paper.
@iohanx: Anyone who has a mortgage now should refuse to pay for the next 3 months. I think this would focus minds.
@iohanx: a big part of the problem is that while it is, in fact, just a piece of paper, it has the status in law of a person.
They will have the chat, and carry on the same way.
Make all banks reapply for their banking license, might sharpen their pencils a bit.
Bankers have to be jailed in this country like the US, no messing there. They have been bailed out by the tax payers for their greed and are still arrogant and ignorant towards ordinary people. Its an elitist country that needs to change, they continue to as one prominent banker said ‘pull figures out of their arse’ and no serious repercussions for them. The unfortunate situation is that this is a small country and the elitist top dogs all know one another, from bankers to politicans to the legal eagles they are friends, partners, business associates and they dont want to rock the gravy-boat on one another. It will take a strong political, incorruptible, unconnected and moral leader to do something and thats one person we dont have in Ireland.
@Seán Dillon: politicians will never jail their bosses
So in simple terms .The banks were responsible for all the bullshit that happened when the country crashed. And yet they are still being allowed to do WHAT THEY WANT with out any questions being asked. Strange country !!! Has the Irish government ever heard of the term REGULATIONS.
The Icelandic solution should be followed,jail corrupt bankers I.e all bankers b##stards
@Paul O Riordan: don’t hold your breath
@Paul O Riordan: they can open a tracker prison in the town land of Cartel!!!
As people still lose their houses from these robbing bankers who can do whatever they want without any consequence FF and FG are still protecting them
@Donal Carey: especially Michael Noonan !
@Randal McNally: Noonan is gone-its Paschal the Rascals responsibility now-Though I wouldn’t hold my breath.
@Randal McNally: you mean Mr hepatitis!!
Does the Central Bank head remind anyone else of a cross between Beeker and the Swedish chef from the Muppet Show? Only sayin’ like!
@Con Murphy: NAH you mean professor Bunsen honeydew if he shaved the sides of his head, Beaker was his assistant.
Biggest worry is to me, on a variable rate, mortgage from 2006, promised a tracker and not delivered, i.e variable or nothing, if and when ecb rates go up, once again the middle class on variable will be hit hard, tracker at least have had enough to save or expect this.. with Spain volatile and considering all goings on, do we consider fixed!?! #2020 – 2022 crash
Over and over again, the Central Bank has let us down and let the Banks rob us.
Central Banks feed the Banks and Vice versa while the Financial Services Ombudsman watches with complete disinterest. If it was not so damaging and toxic, it would be pure farce.
Stop using these banks find alternative Institutions, Like the post office and credit unions where ever possible.
Banks rule; politicians obey.
The only thing remaining extraordinary about this debacle is this governments deflection of blame onto what has been a grossly incompetent central bank. Government Ministers, including those as far back the horrendous coalition have been aware of this disgraceful tracker debacle. Wheres Michael Noonan, Enda Kenny etc when it comes to seeking answers. The hilarity of Pascal Donahue giving a tongue lashing is beyond comprehension, no doubt the bankers are shaking in their boots at the thought of Pascal raising his voice. Perhaps Leo’s bubble is about to burst. This scandal has been in the public domain since 2008 and regulators have stood bye and done absolutely nothing whilst people struggled to pay their mortgages and in some cases lost their homes. Its beyond outrageous and it also has to be said financial Journalists in the Know where also quite muted on the subject.
Show Lane the Road .
They won’t be able to sort this out it’s too big ,like the breath testing scenario something else will arrive to push this into the background ,NUI Galway will make those involved all doctors and everyone knows we need a load of them
Banks now the small man can’t access the high court without truckloads of cash 12k per day, so why don’t the government set up redress scheme and allow access to justice, it’s simply a breach of contract, with some nasty foul behaviour which in the US would see bank execs do time
There is an obvious cartel between the banks and the central bank. The financial regulator was the cause of the banking chaos but we paid him off with a massive pension and lump sum instead of a few years in Mountjoy and the same is happening again. The ceo of each bank who stole money should be charged with fraud and you will stop the wrongdoing.
And your woman behind your man in the pic is fast asleep how insulting!? This country is a joke how it treats it’s population. Homeless, sick, disabled the the list goes on. Where is it all going to end????????????
@MGallagher: on the streets. Time to march on these guys banks and on their homes.
@MGallagher: she’s not asleep. I agree with you otherwise.
Fine Gael sat on their hands for years on this. A shameful saga happening on their watch.
Corrupt Ireland is as well as she’s always been. Corrupt bankers protected by dodgy politicians. The only outcome form this will be compensation to the people that were ripped off and higher bank charges for the rest of us.
Bankers, Central bank, Vulture fund Noonan, Paschal and the Dept. of Finance are the people and places where the guilty can be found. It would be nice to see a few of them do the perp walk in bracelets. Will it happen?…not a hope.
If I rob a bank and get caught, I am arrested, tried and go to jail. When the bank robs me, their executives get a bonus. Is there a law against banks robbing my money? If so, when they have admitted, (eventually) that they systematically and intentionally took money illegally from people, why is there no arrest and criminal prosecution? Why do these cases not even warrant an arrest? Leo Varadkar, show some leadership and please answer this!!
During the boom years PTSB used to have an ad that made me cringe every time I saw it. In it was a photo of a big 30 plus son in a check shirt sitting between his elderly parents . The aim of the ad was to encourage the elderly parents to help their son to get on the property ladder by lending him the deposit and worse to remortgage the family home to access funds. It’s bad enough to have to spend a lifetime paying off a mortgage without making elderly people feel guilty and getting themselves into debt again when they should be enjoying their twilight years. Banks don’t care about consequences for ANYONE.
Well is clear many many people were charged higher rates than they should . I can only imagine the rage of knowing you are getting done and still seeing the higher repayments coming out every month rubbing it in. It’s absolutely disgusting from the banks.
The problem listening to the radio the last few weeks is that there are examples of people who lost their homes but it’s clear didn’t lose their homes due to the overcharging alone. They simply had no money to pay the mortgage at all regardless interest rate as they overborrowed or their business went bust etc in the recession. wonder how this will get addressed in the courts ?
Banking integrity is an oxymoron.
The CBI and the FSO are demonstrably unfair for purpose.
Why not all that were fiddled get paid by Christmas? Because if they can say that most will, then they know the rest that won’t. Just cute hoor speak to get them out of questioning in January.
You can be sure the bankers are snuggling down with a brandy and chuckling again at the stupidity of their customers, knowing they have so much dirt on their puppets in Leinster house that they cannot be held accountable. Besides, they were in school with the judges and barristers
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