Black_Adder
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Article today in Sunday Times by Niall Brady.
Essentially:
Essentially:
- 1.074 affected according to Brady (which is original PTSB figure)
- 500+ of these are finding that the Tracker Margin they are being offered is at least 2% and in a significant number of cases is 3.25%
- Many of these are going to have to go to Court as the Appeal Board backs PTSB stance
- PTSB refers to the 'appropriate rate' on the contract
- As far as I can see Mr Brady is crediting Padraic Kissane for a lot of this work - a lot of positive comments on internet as far as I can see
- PTSB seems to have 'omitted' margins from some Letters of Offer (part of the 500) in a period prior to banking crisis
- Then put Margins back in (presumably the remainder) in a period prior to banking crisis
- Then took them out (part of the 500) in a period prior to banking crisis
- Using wording like 'appropriate rate' - meaning that after the end of the fixed rate period PTSB would then set the margin .. hence 2% or 3.25
- [The Margin was usually fixed when you took out a Tracker Mortgage - but here was a fantastic variant a Tracker Mortgage that had two variables ! ]
- In any other European Country this would have fallen foul of a number of existing European Directives including Unfair Terms In Contracts and those in the Consumer Protection Act 2007 and the Consumer Protection Code 2006 (at the time) but we have an FSO that upheld 90% of cases in favour of Banks and we have no concept of what consumer protection is actually about. The fact that we have implemented EU Directives and then have not got an agency that knows what to do - could see this end up in Europe when European Law is pleaded in cases going to Court
- This is going to need a concerted effort - and one of the people who has brought this to where it is - Padraic Kissane
- When PTSB staff are put on the witness stand, I am sure that the facts will emerge - I do not see any staff member will fail to tell the truth.
- Regretfully, this is what must now happen - in any event PTSB have told the market a slightly different story - the market was informed of a 'product review' as a cover for any more that will emerge.
- Initially it was a market protection measure - because when it was introduced there was intense competition in the market and PTSB deliberately did not want you to know your margin -so when you were 'refinancing' you had to find out the margin that you were on and then lo and behold PTSB would match (downwards) any apparent offer you were being given. That was the intention.
- When the proverbial hit the fan - this device is what was used to increase the Margin after fixed rate - there was an absence of a margin in many cases.
- PTSB are claiming - no margin in your letter of offer. How does this pass any objective test of clarity and not deliberately misleading the consumer on several levels is beyond me.
- What happened when the crisis hit was that the device that had been thought up - deliberate omission of margins to allow for favourable repricing in the highly competitive market - now became a tool to restore profitability by translating these mortgages to the next best thing to SVR - a gigantic 325 basis points margin. PTSB will have had to deliberately mislead themselves, the CBI enforcement team , the Department of Finance - or perhaps these agencies did not enquire too deeply.
- Wonder what PTSB will say at the results sequence to Investors in 2nd week of March?
- It is not clear what the Terms of Reference are for the Appeals Board - for example if as reported they have upheld the PTSB 2%+ margin then they are essentially following a predetermined basis for refusal, which would seem to be legal advice that PTSB will have produced. This is fatal as it means they have not understood the full basis for this - because if they did - they would have problems with matters of deliberate omission albeit the original motivation may have been for competitive reasons but how the letter of offer was then in '..plain intelligible language..." which apparently PTSB will say it is, is frankly a subjective view.
- I think unless the Terms of Reference for the Appeals Board are now published - as they seem to have not heard any argument that the vast majority of customers could not possibly be aware of - then it will be seen to be fatally flawed. Many practitioners will advise clients to take legal action and I note a number of firms being mentioned in that regard.
- How the Central Bank will continue to preside over this remains to be seen.
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