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.