Ombudsman publishes 25 Tracker decisions

Brendan Burgess

Founder
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40,632
The Ombudsman has just published 25 Tracker decisions today

The full report

I have extracted the three substantially upheld decisions and attached them to this post.


Here is my initial summary of them.

The Ombudsman’s summary

Upheld8
Dismissed17
Total25



Only 3 substantially upheld


Bank of Scotland case tracker restored – customer not advised that fixing would lose tracker
Ptsb - Additional compensation of €52k
Ptsb - Additional compensation of €45k


Bank of Scotland case


  • Started on a tracker of ECB + 1%
  • Fixed for 3 years
  • When fixing the documentation said “at the end of the fixed rate you will go onto the Standard Variable Rate”
  • Ombudsman held that they should also have spelled out “You will lose your tracker”
  • Told BoSI to restored the tracker at ECB +1%
  • Paid the borrower €2,500 compensation on top of the refund of €6,000 overcharged interest
  • Ombudsman referred the matter to the Central Bank as other customers impacted by the same decision
  • BoSI will apply the decision to all those affected
  • In 2018, BoSI sold these mortgages to Pepper and BoSI has agreed with Pepper to put them all on trackers
This is not as huge as it seems. The BoSI SVR was unusual in that it actually had a price cap of ECB + 1.5%. So the overcharge was “only” 0.5%. So the refund was only €6,000 in the actual case.

This is an example of a case, where the borrower would have been laughed out of the High Court if they had taken a case. The Ombudsman legislation gives him much wider discretion.

Compensation case 1 - ptsb

  • Two lads owned a house
  • Their girlfriends lived with them.
  • They tried to make the house more habitable but could not afford to do so because of the high mortgage rates
  • They wanted to get married and could not afford to
  • The automatic compensation was €9,500
  • The Appeals panel rejected their appeal for more compensation
  • Despite this, ptsb offered an extra €7,000 which the borrowers rejected
  • The Ombudsman awarded them an extra €43,000 to bring it to €52,500
Compensation case 2 – ptsb

  • Mother and daughter bought a house together
  • €6,000 in automatic compensation
  • They were in arrears which they would not have been if they had been charged correct rate
  • The credit rating was damaged
  • The daughter had to go to counselling for stress
  • Appeals Panel rejected their appeal
  • Ptsb offered to increase the compensation from €6,000 to €15,000
  • Ombudsman awarded an extra €30,000 to bring it to €45,000 in total




5 Partially upheld - the borrowers would conclude that these were losses


€3,000 additional compensation – had claimed over €50k
€3,000 for a delay in moving a mortgage to a new property
€3,000 Not entitled to tracker , but typo -
€2,500 Not entitled to trackers, but poor information
Not entitled to a tracker, but bank not adhering to CPC - Not sure of award or which case this is


It can be seen from the tracker related decisions published with this digest that 17 complaints were not upheld. I believe it is likely that it will continue to be the case that a large number of

complaints relating to tracker interest rates on mortgage loans will not be upheld. This is because some complainants have unrealistic expectations, believing that their desire to have a tracker interest rate provides a basis for requiring their bank to grant them one. There seems to be a lack of understanding, by some complainants, that for a person to have an entitlement to a particular tracker interest rate there must be some contractual or other obligation on their bank entitling them to such a rate.



1152 complaints on hand



Two issues which are often raised on Askaboutmoney

  • I moved house and the bank did not let me take my tracker. Ombudsman found in favour of the bank. No obligation to do so.
  • I was never offered a tracker although they were available. The Ombudsman believe that the the borrowers could have informed themselves. But as the fixed rates were lower, he found it difficult to accept that they would have taken a tracker option if it had been offered.
 

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Brendan Burgess

Founder
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My commentary

Summaries of 16 decisions are included in the digest.

4 were for additional compensation where they had had their tracker reinstated, 2 got substantial compensation, 1 got an extra €3,000 although she claimed over €50k, one got nothing.

12 relate to people claiming trackers , only one was awarded a tracker. However, as this was a systemic issue, Bank of Scotland has agreed to apply it to all other affected customers.

The report shows what a good job the Central Bank has done. The banks went well beyond their legal obligations in settling tracker disputes. The result is that the banks' decisions not to give people trackers, were generally upheld by the Ombudsman.

The one person who got their tracker back would have been very unlikely to succeed in the High Court.
 

Megafan

Registered User
Messages
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From the press conference, in the context of the not mentioned prevailing rate cohort the below wording by the Ombudsman is very telling, making specific reference to contractual obligations (which is what 3.2 is by extrapolation). I am not close enough to past updates from the Ombudsman to say if this is a recurring public statement. It may very well be.
____________________________________________________________________________________________________________________________

I hope that by publishing these decisions it will highlight that although many people would like to have a tracker mortgage, in order for a person to have an entitlement to a tracker interest rate, there must be an obligation on the bank, contractual or otherwise, that entitles the mortgage holder to a tracker interest rate," Mr Deering said
___________________________________________________________________________________________________________________________

I wonder for those who were in the trenches over time whether getting a large lump sum at the end of a process is better that getting smaller annual amounts over time, that is, if a tracker was effective from when it should have been? Some redress to a person is life changing now, rather than incrementally improving circumstances each year over time.

I expect it is a different situation for people who's circumstances allowed to manage/muddle though/be comfortable over the 10 years or so, as opposed to those who truly struggled over that time. Anyone fortunate enough to be put back on a tracker probably only needs to look over their fence to see someone who isn't, the Ombudsman's point above is well made.

Brendan makes a good point about how far the banks have come, whether kicking and screaming or not, they are getting there.
 

NicOir

Registered User
Messages
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Hi Brendan

Was there any ruling expected today in relation to KBC and the flyer cohort pre Nov 2006?

Many thanks
 

demoivre

Frequent Poster
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2,650
From the press conference, in the context of the not mentioned prevailing rate cohort the below wording by the Ombudsman is very telling, making specific reference to contractual obligations
He said " contractual or otherwise" as your quote above shows

I hope that by publishing these decisions it will highlight that although many people would like to have a tracker mortgage, in order for a person to have an entitlement to a tracker interest rate, there must be an obligation on the bank, contractual or otherwise, that entitles the mortgage holder to a tracker interest rate," Mr Deering said

I think the word " otherwise " is important in this context.
 

tnegun

Frequent Poster
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268
Just curious why you think "otherwise" is important to the Prevailing Rate cohort? There was a contractual obligation to a tracker was there another?
 

TrackerThieves

Frequent Poster
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140
is it possible to know if there were any individual tracker cases in these 25? as in cases the central bank hadn't been involved in
 

Megafan

Registered User
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Maybe Mr Deering is referring to a “Legitimate expectation” of the borrower.
Agreed. Contractual or otherwise probably compliment each other or widen the net further than just noting a contractual element.

Or we could be reading too much into the comment! Though it seems deliberate and specific.
 

tnegun

Frequent Poster
Messages
268
Yes I skimmed the publication he seems very particular on the contractual obligations and expectations for both the bank and client. I did get a laugh at the my twin got a tracker so I should too claim, people will really try anything.
 

peemac

Frequent Poster
Messages
727
"there must be an obligation on the bank, contractual or otherwise, that entitles the mortgage holder to a tracker interest rate"

I think this is saying that the customer must show some form of obligation by the bank if they cannot show it in their contract.

The KBC flyer is an example of such.



But I can't see how the term "prevailing variable rate" can show any obligation and I think those looking at that angle should prepare themselves for disappointment.
 

Wonder

Registered User
Messages
45
"there must be an obligation on the bank, contractual or otherwise, that entitles the mortgage holder to a tracker interest rate"

I think this is saying that the customer must show some form of obligation by the bank if they cannot show it in their contract.

The KBC flyer is an example of such.



But I can't see how the term "prevailing variable rate" can show any obligation and I think those looking at that angle should prepare themselves for disappointment.
Kbc flyer say all fixed rates roll onto the tracker rate and then also gives the rate for new customers.
I think that says enough ,
Two rates for two different customers.
All contracts with the
WORDS: Prevailing variable rate .
Before and after the dates of the kbc flyer.
No mention of a standard variable rate.
Just because you didn't have the right advice at the right time PEEMAC mean the rest of us will be disappointed.
 

Darn40

Frequent Poster
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77
I also think the fact that kbc didn’t explain the lenders prevailing variable rate in the contract is going to be a big problem for them.
 

NicOir

Registered User
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Hi Wonder, from reading your posts on another thread were you hoping on a decision from the ombudsman last week?
 
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