PTSB ptsb fined €21m by the Central Bank

Brendan Burgess

Founder
Messages
38,654
This doesn't seem to capture it in my opinion

1. Failure to warn certain customers about the consequences of decisions they might make relating to their mortgage: PTSB failed to warn certain customers that they would lose their tracker mortgage entitlements as a consequence of their request to break early from a fixed or discounted interest rate.

2. Operational and systems failings: PTSB did not have adequate systems and/or operational controls in place to enable them to meet their contractual and regulatory obligations to certain customers. This included over-reliance on manual intervention and a lack of clarity at that time in relation to who was responsible for mortgage products within PTSB.

3. Decision to deny certain customers their correct tracker rate between 2009 and 2010: PTSB made a decision to deny certain customers their entitlements to the correct lower tracker rate between 2009 and 2010 unless the customer specifically requested it, or queried or complained.
4. Incorrect legal interpretation of contractual terms and conditions: PTSB denied certain customers their enduring contractual right to a tracker mortgage as a result of PTSB’s incorrect interpretation of the extent of certain customers’ contractual entitlements.

I attach the full press release
 

Attachments

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ragdal

Frequent Poster
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73
Who gets the 21 million? Should be split across the 2007 affected customers in my opinion
 

Brendan Burgess

Founder
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38,654
I will be talking about this at 5 pm on Matt Cooper . These are my initial thoughts.
Ragdal - I will add that to the list.

Brendan
This is a big fine, so it’s very welcome on the face of it

€32m for 2,007 customers

A total of 40,000 were affected.

Does that mean that the total fines will be €600m?

Was there a deliberate and systematic attempt to deprive people of their trackers e.g. a system error which charged no break fee?

If so the fine is justified.

But , why is no one being fined personally?

Someone made these decisions or errors. Some committee did that plan. So, why is there no one named? There were a lot of bad things done, but why has no individual been sanctioned?



Who will pay the fine and who will benefit?

The cost will be just passed on to customers in terms of higher mortgage rates

What did ptsb do wrong?

  • When the Ombudsman and High Court found against them, they went to the Supreme Court. That was outrageous. Particularly since the High Court judge , Mr Justice Hogan had said
43. This, undoubtedly, is a sophisticated and clever argument which, for example, had it been advanced in an undergraduate law examination would have attracted high praise from the examiners as an original demonstration of legal craft and skill.

But this type of argument should really have no place in the construction of financial documents involving retail customers



  • Did they engineer an error to encourage people to break out of their fixed rate early so that they would lose their rights to a tracker?
  • This Special Condition 706 issue. They conceded the lower tracker rate only to those customers who complained. They should have given it to everyone affected by the issue.
What did they do right?

  • They were the most efficient at doing the redress scheme. They finished first.
What about people who are still in dispute with ptsb?

  • There are thousands of customers who were put on a tracker rate of 3.25% . They dispute that rate.
Incorrect legal interpretation of contractual terms and conditions: PTSB denied certain customers their enduring contractual right to a tracker mortgage as a result of PTSB’s incorrect interpretation of the extent of certain customers’ contractual entitlements.

Is that the basis for a fine? The Ombudsman rules every day against Financial Institutions. That doesn’t mean that they should be given a fine?

 

Brendan Burgess

Founder
Messages
38,654
I called the Central Bank to ask if this means that there will be no sanctions against individuals in ptsb and they told me that they could not comment.

So the fact that no individual has been sanctioned does not mean that they won't be at some time in the future.

Brendan
 

Brendan Burgess

Founder
Messages
38,654
The fine goes to the Central Bank and any surplus from the Central Bank at the rest of the year goes to the Exchequer.
4. Funds collected from penalties are included in the Central Bank’s Surplus Income, which is payable directly to the Exchequer, following approval of the Statement of Accounts. The penalties are not included in general Central Bank revenue.
 

SaySomething

Frequent Poster
Messages
565
4. Funds collected from penalties are included in the Central Bank’s Surplus Income, which is payable directly to the Exchequer, following approval of the Statement of Accounts. The penalties are not included in general Central Bank revenue.
So therefore the distribution of the fine to affected customers is at the discretion of the C&AG/Minister for Finance?
 

noproblem

Frequent Poster
Messages
1,890
This makes a good news story at first glance and the media throws it out there with the headlines grabbing peoples attention. However, is it not the very customers who have been conned who will once again pay for all this, while the people or committees who are/were responsible getting away scot free? I and everyone else know that the individuals in this Bank and other Banks will continue to stretch the rules to suit themselves until there are criminal sanctions on the statute books to go after them. It's wrong, it's time to stop it and, what exactly is coming down the line and when, by means of strict law to prevent individuals at the top of these Banks doing this again and again. Something tells me this is only the beginning!!!!!
 
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Michael S

Registered User
Messages
2
So what about those of us who were put on a tracker rate of 3.25% +ECB, are we to take it that we will not be receiving compensation at any time?
 

zibra82

Registered User
Messages
10
Hi Brendan Burgess just wondering if that applies to customers that choose the variable rate @3.65 in 2009cause it was lower then tracker (they bumped up tracker to 4.25) and was wrongly informed that they can always change...the only time you couldn't change was if they choose fixed rate cause then to change you will have to pay a fine...and we were never informed that tracker won't be available in 2010 even though in 2006 we signed the contract with 3 options...is that not break of t&c
 

October2019

Registered User
Messages
45
I will be talking about this at 5 pm on Matt Cooper . These are my initial thoughts.
Ragdal - I will add that to the list.

Brendan
This is a big fine, so it’s very welcome on the face of it

€32m for 2,007 customers

A total of 40,000 were affected.

Does that mean that the total fines will be €600m?

Was there a deliberate and systematic attempt to deprive people of their trackers e.g. a system error which charged no break fee?

If so the fine is justified.

But , why is no one being fined personally?

Someone made these decisions or errors. Some committee did that plan. So, why is there no one named? There were a lot of bad things done, but why has no individual been sanctioned?



Who will pay the fine and who will benefit?

The cost will be just passed on to customers in terms of higher mortgage rates

What did ptsb do wrong?

  • When the Ombudsman and High Court found against them, they went to the Supreme Court. That was outrageous. Particularly since the High Court judge , Mr Justice Hogan had said
43. This, undoubtedly, is a sophisticated and clever argument which, for example, had it been advanced in an undergraduate law examination would have attracted high praise from the examiners as an original demonstration of legal craft and skill.

But this type of argument should really have no place in the construction of financial documents involving retail customers




  • Did they engineer an error to encourage people to break out of their fixed rate early so that they would lose their rights to a tracker?
  • This Special Condition 706 issue. They conceded the lower tracker rate only to those customers who complained. They should have given it to everyone affected by the issue.
What did they do right?

  • They were the most efficient at doing the redress scheme. They finished first.
What about people who are still in dispute with ptsb?

  • There are thousands of customers who were put on a tracker rate of 3.25% . They dispute that rate.
Incorrect legal interpretation of contractual terms and conditions: PTSB denied certain customers their enduring contractual right to a tracker mortgage as a result of PTSB’s incorrect interpretation of the extent of certain customers’ contractual entitlements.

Is that the basis for a fine? The Ombudsman rules every day against Financial Institutions. That doesn’t mean that they should be given a fine?
Anyone got the recoding of Brendan on Matt Cooper today?
 

24601

Frequent Poster
Messages
166
It's terribly easy to fine a 75% State-owned bank €21m and distribute the fine back to the State. The net effect of this is that both the taxpayer and PTSB customers are going to get shafted. If there was a conscious effort on the part of any functions/individuals within the bank to attempt to bring about the overcharging that occurred (which we must now assume there was), there has to be personal responsibility, fines and jail time.
 

Adobe1

Registered User
Messages
10
The fine is welcome but that should be it. It’s an extraordinary amount of money. This bloodlust looking for individuals in there to be fined/ sanctioned/ excecuted or whatever is unnecessary. They’ve already been hammered and some have lost their jobs too - probably appropriately so (no, I don’t work for PTSB). I know people lost their homes and investments. That was entirely disgraceful, outrageous and unacceptable too, hence the fine and the consequences for the people who did this.

It’s the same mob mentality that devoured Maria Bailey this last week. She made a mistake (more than one), but the way she was vilified was outrageous.
 

Foxy007

Registered User
Messages
23
I actually work for a bank and I think they should put the fines at the amount it cost to redress. I know bank staff will lose their job but that happens in other industries when mistakes are made and products don't sell. I don't see my job as a safe haven and take what I do very seriously as it impacts so many peoples lives and mental health. It needs to be punitive and mean that if a bank does it knowingly there needs to be dire consequences. I don't think its enough.
 

Luternau

Frequent Poster
Messages
894
I actually work for a bank and I think they should put the fines at the amount it cost to redress....... It needs to be punitive and mean that if a bank does it knowingly there needs to be dire consequences. I don't think its enough.
I agree with you. €21m is not a meaningful monetary sum to an organisation turning over so much gross profit and able to shield profit by legacy losses.

PTSB are really bad when it comes to systems and accurate information. They made an error with some of my accounts meaning they took a higher than agreed payment. This caused me to miss payments due to insufficient funds. They then chased me for the shortfall in money (which they had no right or authority to take from my account). When their mistake was resolved (through my solicitor) they did not apply it correctly and at the same time I was being hassled by another part of the company for money I did not owe. In fact, they owed me money. They were not interested – computer said I owed the money and I had to pay it. I told them to stop calling me, not to call me between 9 and 5, but they kept calling seeking money. They would not listen. They did not care. The calls became more and more aggressive. It was their systems that caused all this. I got no apology for any of this.

A fine of €210m would be more punatitive and a higher form external supervision order imposed on them. So what if it's onerous They need external supervision. Even then, I would never trust them again. I am sure my experience is mild compared to many others.

PTSB is a shocking institutional systems failure. A fine of €21m won't change that.
 

SaySomething

Frequent Poster
Messages
565
I agree with you. €21m is not a meaningful monetary sum to an organisation turning over so much gross profit and able to shield profit by legacy losses.

PTSB are really bad when it comes to systems and accurate information. They made an error with some of my accounts meaning they took a higher than agreed payment. This caused me to miss payments due to insufficient funds. They then chased me for the shortfall in money (which they had no right or authority to take from my account). When their mistake was resolved (through my solicitor) they did not apply it correctly and at the same time I was being hassled by another part of the company for money I did not owe. In fact, they owed me money. They were not interested – computer said I owed the money and I had to pay it. I told them to stop calling me, not to call me between 9 and 5, but they kept calling seeking money. They would not listen. They did not care. The calls became more and more aggressive. It was their systems that caused all this. I got no apology for any of this.

A fine of €210m would be more punatitive and a higher form external supervision order imposed on them. So what if it's onerous They need external supervision. Even then, I would never trust them again. I am sure my experience is mild compared to many others.

PTSB is a shocking institutional systems failure. A fine of €21m won't change that.
You could be forgiven for thinking this kind of behaviour was any other bank in Ireland. It's indicative of the banking culture we have. The fine imposed isn't going to change it either.
 
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