PTSB Ombudsman rejects complaint on ptsb discounted tracker

Brendan Burgess

Brendan Burgess

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This is disappointing for those involved:

https://www.fspo.ie/decisions/documents/2020-0157.pdf


It's worth reading the entire decision, but this is the key point which is difficult for a complainant to overcome:


If the Complainants were not happy with the terms of the Letter of Approval, including the type of interest rate or the fact that the mortgage loan contract did not stipulate a specific tracker mortgage rate margin that would be applied at the end of the discount period, the
Complainants could have decided not to accept the offer made by the Provider. Instead the Complainants accepted the Provider’s offer by signing the Acceptance of Loan Offer on 26 February 2008, and in doing so, confirmed that their solicitor had fully explained the terms
and conditions of the mortgage loan to them.


Brendan
 
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It's not clear how well he argued this case.


It's clear to me that ptsb has the commercial discretion to set the rate at 2.25% so that arguing that is excessive is pointless.

The terms and conditions were clear

If applicable new business discount tracker rates:
The New Business Tracker Rate is a discounted tracker rate applicable for a period of
12 months from the date of loan issue. At the end of that period, the interest rate will
not be more than a certain percentage over the European Central Bank Refinancing
Rate as may be varied from time to time.



The argument I would make is that calling the product "A Discounted Tracker" is misleading and is in breach of the Consumer Protection Code which says:


3.2 A regulated entity must ensure that the name of a product or service is not misleading in terms of the benefits that the product or service can deliver to a consumer.

If ptsb had called the product "A one year tracker" fair enough, although that too would be a misleading term.

4855


What is a "discounted" product? It is a discount by a specified percentage from another specified rate?

For example, this is how ptsb advertises its rates today

4856


After 1 year your discounted mortgage rate will revert to one of our managed variable rates in line with your LTV at the time of loan issue (this will be 0.50% higher than your discount rate)”).

That is what I would have expected had I taken out a discounted tracker rate. That it would have been the normal rate.

When you call something a tracker, the margin is fixed for the life of the product unless it is specified in the name of the product that it only tracks for one year.

Brendan
 
Very disappointing decision. Definitely these "discounted" trackers with Clause 9 were missold. Similar ptsb "discounted trackers" were sold which DID revert to the undiscounted rate. So, ptsb changed the terms and the fundamental nature of the product, and left the old name in place. If that is not blatant deception of the consumer, then what is. A One or two Year Tracker is the correct name for these "discounted trackers" and ptsb should be made to try and defend their atrocious abuse of consumer protection by mis-selling these discounted trackers, if not by the ombudsman then in court. However, court is very expensive route for ordinary people, and banks have teams of expensive "top class(?)" lawyers to defend their actions, so again the banks, who we bailed out with our hard earned taxes, again have the upper hand against the consumer. Disgraceful.
 
Hi Stitcher

Agree with most of what you say apart from describing it as "disgraceful.".

We don't know the arguments put forward but it looks as if he did not argue it very well.

And I might well disagree with the Ombudsman or with a High Court judge, but I would not describe it as "disgraceful".

Brendan
 
Ok, the heat of the moment expression and 10 years of fighting to be heard.

Disappointed, perhaps instead.

I will await the outcome of other discounted tracker cases from FSPO office and hope for the best. But I cant help but feel cheated by the banks and let down by a negative ombudsman's decision on my case 10 years ago.
Disapointed to be sure.
 
Very deflated. Does this decision mean all others in the same boat are dead in the water? I know PK is submitting my case along with others so might have a stronger case than this one but is it to late now?
 
The Ombudsman looks at every case separately.

However, he likes to be consistent. It would make no sense rejecting this and then upholding an identical one next week.

I would guess that the Ombudsman operates like this.

1) He gets all the cases in a similar cohort who are at the investigation stage together.
2) He looks at the arguments in every case. He probably does not want to reject a badly prepared complaint.
3) He makes a decision in principle.
4) He applies this to each case.

So the only way PK or anyone else can get a favourable decision here is

1) if he can make a new and persuasive argument which the Ombudsman has not considered before.
2) There are some circumstances peculiar to the individual case e.g. an email from ptsb saying that the tracker margin would be about the same.



If I were in the Discounted Tracker cohort...
I would put my complaint on hold.
I would see can I get 100 people in the same cohort
I would go to the High Court

But if you have not been able to get a group together by now, I doubt you could get a group together.

So the Ombudsman is your only chance.

Brendan
 
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I agree with you on the consistency part. I am with PK so as you say he may be able to new argument that the ombudsman hasn't considered.We live in hope but as I say feel very deflated.
 
I read through this decision in detail today.

In my opinion, the complainant did not evidance that they had an understanding from PTSB of a specific margin that was to be applied rather than the 2.25% margin that was applied from month 13. As such, Special Condition 9 is all the FSPO can go on... and
that gave PTSB freedom to apply/offer whatever tracker margin it was offering from month 13 onwards.

What strikes me about this case is the failure of PTSB to provide a copy of the "Rate Options Letter" in evidence or to give any explanation as to why it was not provided (see fspo comment on page 9). The complainant made a statement questioning why such an "options" letter was even issued given the Letter of Offer made no reference to it. It was something of a mute point in this case as the complainant selected the tracker option. FSPO commented that "it was not in dispute that the option letter provided for a tracker rate option".

The question I raise is as follows:

- Was the "options letter" issued and worded in a manner consistent with the contract?
- did rate options letter refer to the discount period ending or did it state that the Borrowers rate option was due to end and suggest a further rate choice was required? (No rate option or requirement for further rate choice was required under the contract).
- at a margin of 2.25%; the complainant probably selected the tracker as it provided the lowest rate?
- what of those Borrowers who selected an alternative rate and therefore lost their tracker? I believe there is a small cohort of Clients effected here who have a strong case.

The Special Condition 9 on the Letter of Offer was silent on a requirement for a further rate choice or the existance of a rate "option".

Very interesting (telling?) that PTSB did not provide a copy of options letter to FSPO... whilst not entirely relevant to the complainant in this instance, the options letter issue is central to those who were led away from the tracker rate from month 13.
 
Hi PFS

Is this not it on Page 10 of the decision

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The problem for most people is that they saw a variable rate of 4.05% which was lower than the tracker rate and they took that. This would ultimately cost them greatly as the ptsb SVR went up to 6.25% at one stage.

Brendan
 
Hi Brendan,

Thats the "rate options form" that accompanied the "options letter". I note my error in not noticing the variable rate was 0.2% lower on that options form tham the tracker. By June 2008 the difference was 0.6% between Variable Rate and 3.25% tracker margin.

I am noting the fspo is taking ptsb at its word regarding content of options letter. ie: " I note that the Provider submits that it wrote to the Complainants prior to expiry of the discounted period in March 2009 to remind them that the discount period was coming to an end and to provide details of the rate options available to them".

I would point out two things:
1) thats not what ptsb said on the rate options letter they sent to me. The letter was silent about the ending of a discount period. It simply stated the current rate option would end on a particular date and that a new rate choice was required.
2) Special Condition 9 of the Letter of Offer made no reference to either a "rate option" or to a requirement to make a separate intetest rate type selection after month 12.

I am not arguing that there was a tracker rate price promise. I am arguing that:
1) the "rate options letter" was sent on an unsolicited basis (the Special Condition made no reference to a further choice of rate type being required or to PTSB issuing a rate options letter).
2) the rate options letter wording was not consistent with Special Condition 9. (No rate "option" was ever referenced nor was a requirement referenced to make a 2nd seperate choice of rate type).
3) the rate options letter gave warning that a tracker option may not be available on expiry of a fixed rate had customer chosen a fixed rate option. No warning was given that you could not move back to a tracker rate from the variable rate.

I remain hopeful.

PFS.
 
I am just wondering what the reason is for ptsb saying in that options letter "ECB + maximimum of 2.25%". Could they in the interest of their customers envision a day they might reduce it ? The new rate was above the variable, and the tracker element was 2 to 4 times higher than the discounted rate, or the undiscounted rate, which was usually only 0.2% higher than the discounted one.

These discounted trackers were being sold as competitive rates to attract customers, and they were competive until they started to insert special condition 9 without alerting customers that this change represented a dramatic change to what a discounted trackers was before (rolling on to the undiscounted rate after 1 or 2 years, no special condition 9, no option letter needed). They should have changed the name to 1 or 2 year tracker like fixed rates, where you know you have to choose something after that time. How many discounted tracker people would have selected a 1 year tracker or 2 year tracker back then ?
Definitely not me.
 
I can't understand this at all.

In retail, if you show a discount, you need to show what it is discounted from - unless you are DFS and their infamous discount off "after event price".

I always thought that this cohort would be the most likely to win back their tracker. Very disappointing for those it affects especially as ptsb have ripped them off with excessive rates ever since.
 
Aye peemac..must say I thought the same as you. Anyway my case is with P Kissane who hopefully can do a better job in persuading the ombudsman...
 
I would agree with Brendan that the bank may have broken the Consumer Protection Code. It is very unfortunate that the Ombudsman’s did not comment on this apparent breach, but it would appear that the Complainants were missold a product by calling this a discounted tracker.

As the ombudsman never debated the fact that the CPC could have been broken, this gives another example of the FSPO lacking the debating skills, to assess the relatives merits of the case at hand.

The other point I would make is that on page 11 of the decision by the FSPO in the above mentioned case the ombudsman refers to the rate options letter and the conditions regarding trackers loans at the reverse of this document.

There were four conditions mentioned but I would just note that these conditions as outlined by the FSPO are not just something like ‘guidance notes’. These conditions were also at the back of all loan offers issued by PTSB over the years and they are in fact a legal requirement under the Consumer Credit Act 1995.

Again, the ombudsman just list these conditions but bizarrely makes no comment how any of these conditions may apply to the case at hand.

Just let examine one of these conditions- Point no 1 on page 11 of the decision.

‘ The interest rate applicable to Tracker Mortgage Loans is made up of the ECB plus a percentage over the ECB rate. The amount over the ECB rate will depend on the amount of the loan and that percentage will not be exceeded during the term of the loan’.

So the ombudsman quoted this and other terms in his report but yet never debated this condition in relation to this case.

If you analyse the wording in this condition, one could argue that a tracker margin once started should not increase over the full term of the loan, but yet this was never discussed by the FSPO.

There could therefore be a conflict between this condition and Special Condition 9 as mentioned in the report when the fixed rate expires.

The current ombudsman is very poor in my opinion at debating the important points in many cases brought before him and this case is just another example of this.

I would point out, however, that he may still have arrived at the correct decision in this case , but his method of arriving at some of his decisions is indeed strange to say the least, in my opinion.
 
My PTSB discounted tracker complaint has now been registered with the FSPO. Let's see what happens. I will keep you updated with any updates as the process continues.
 
core123 said:
My PTSB discounted tracker complaint has now been registered with the FSPO.
Click to expand...

Hi Core

I don't understand this. Why have you just registered it now?

Why did you not register this years ago?

My concern with the AIB Prevailing Rate issue was that someone else with a badly prepared case would get a decision from the Ombudsman first and create a sort of precedent which would be hard to overcome.

I am concerned that this may have happened here.

It happens in the courts all the time. The same issue is litigated by a number of different parties and the later ones have to sit back and watch the first one up make a bags of it.

Brendan
 
Hi Brendan,

I am with Padric Kissane and he is looking after my affairs on this and I got an email to say it is now been submitted in the last couple of weeks.
 
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