Brendan Burgess
Founder
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I have attached the full statement from the Central Bank, but here is my briefing note on the issue
Central Bank’s findings
1. Failed to disclose to impacted tracker customers all the consequences of fixing their interest rates;
2. Devised and implemented a deliberate strategy not to provide certain customers with their correct tracker mortgage entitlement unless they complained and to treat those customers who did complain in an inequitable manner;
3. Failed to adequately implement the TME’s Stop the Harm principles to protect all potentially impacted tracker customers from further detriment;
4. Failed to ensure that its operational systems and controls were sufficient to ensure that its customers were provided with their correct tracker mortgage entitlements;
5. Devised and implemented a deliberate strategy of encouraging customers to convert their tracker rates to fixed rates between August and October 2008;
Schedule of tracker fines
Previous Ulster Bank fines
In addition to this, Ulster Bank has topped the Ombudsman’s list of Upheld Complaints in 2019. See below.
What was so egregious about the Ulster Bank case?
In 2011, the Ombudsman upheld a number of complaints against Bank of Ireland on a systemic tracker issue. Bank of Ireland faced up to it and put 2,096 customers back on trackers, whether or not they had complained.
Back in 2010 when the Ombudsman upheld these complaints against Ulster Bank, the Ombudsman sent them to the Central Bank. There was widespread reporting on Askaboutmoney and in the media of these cases. But the Central Bank did nothing.
Having said that, the current team has done a great job. Ulster Bank made it quite clear than they would not have given trackers back to people unless they had complained. Very few ever complained. Without the Central Bank intervention, these customers would still be paying the highest mortgage rates in the Eurozone.
What lessons can we learn?
When the Ombudsman makes a finding in a case that affects other people in the same cohort, the Ombudsman must have the power to direct the financial institution to apply that finding to all other customers in that cohort.
The Ombudsman must be given the power to go public on the issue including naming the institution involved so that others who might be affected by it, can raise a complaint with the institution.
[broken link removed] in 2019 – page 31
(Ulster Bank did not appear on the Top Ten list in 2018)
Central Bank’s findings
1. Failed to disclose to impacted tracker customers all the consequences of fixing their interest rates;
2. Devised and implemented a deliberate strategy not to provide certain customers with their correct tracker mortgage entitlement unless they complained and to treat those customers who did complain in an inequitable manner;
3. Failed to adequately implement the TME’s Stop the Harm principles to protect all potentially impacted tracker customers from further detriment;
4. Failed to ensure that its operational systems and controls were sufficient to ensure that its customers were provided with their correct tracker mortgage entitlements;
5. Devised and implemented a deliberate strategy of encouraging customers to convert their tracker rates to fixed rates between August and October 2008;
Schedule of tracker fines
| Springboard (ptsb subsidiary) | €4.5m | Nov 2016 |
| Ptsb | €21m | May 2019 |
| KBC | €18m | September 2020 |
| Ulster Bank | €38m |
Previous Ulster Bank fines
| Mortgage Arrears | €4.6 m | March 2020 |
| Anti money laundering | €3.325m | Nove 16 |
| IT failures | €3.5m | 2016? |
In addition to this, Ulster Bank has topped the Ombudsman’s list of Upheld Complaints in 2019. See below.
What was so egregious about the Ulster Bank case?
- They knew that some customers had a right to trackers, but they did not give them to them unless they complained. The Central Bank has not made this finding against any other lender.
- Even when they complained, Ulster Bank put up all sorts of barriers in their way. Forcing them to go to the Ombudsman and not conceding until the very last minute.
- Furthermore, customers who did complain (in relation to 352 mortgage accounts) were
- managed on a case-by-case basis and were not all afforded the same redress and
- compensation. Later, as more customers complained and were returned to tracker rates,
- UBID introduced a questionnaire designed to test the extent to which a complainant was
- “genuinely” confused as to their default interest rate as opposed to whether a complainant
- had submitted a complaint on the basis that they had heard that other customers with similar terms and conditions had, following complaints, been returned to their original tracker rate. This put in place a higher evidential bar for complaining customers. UBID also did not return all customers who complained by way of filling out the questionnaire to their original tracker rate or provide them with compensation. As a result of UBID’s treatment of complaints, all impacted customers did not receive their correct redress and compensation until the Central Bank required UBID to provide it to them under the auspices of the TME.
- In 2008, they had a deliberate campaign to encourage people off their trackers. The Central Bank fined KBC for doing the same thing. It was alleged against permanent tsb, but the Central Bank did not find that this happened.
- They did not “stop the harm” in time. When they knew people were impacted, they should have told them immediately. The effect of this was that 7 people sold their homes because their mortgages were not sustainable. Had they been told earlier, they would have kept their homes.
- The documentation wasn’t clear enough
- They did not tell people that they would lose their trackers if they fixed
- Their systems to identify those affected were terrible
In 2011, the Ombudsman upheld a number of complaints against Bank of Ireland on a systemic tracker issue. Bank of Ireland faced up to it and put 2,096 customers back on trackers, whether or not they had complained.
- This was the right thing to do for customers
- It was the right thing to do for the bank – they faced no huge compensation claims by dragging it out for 10 years.
Back in 2010 when the Ombudsman upheld these complaints against Ulster Bank, the Ombudsman sent them to the Central Bank. There was widespread reporting on Askaboutmoney and in the media of these cases. But the Central Bank did nothing.
Having said that, the current team has done a great job. Ulster Bank made it quite clear than they would not have given trackers back to people unless they had complained. Very few ever complained. Without the Central Bank intervention, these customers would still be paying the highest mortgage rates in the Eurozone.
What lessons can we learn?
When the Ombudsman makes a finding in a case that affects other people in the same cohort, the Ombudsman must have the power to direct the financial institution to apply that finding to all other customers in that cohort.
The Ombudsman must be given the power to go public on the issue including naming the institution involved so that others who might be affected by it, can raise a complaint with the institution.
[broken link removed] in 2019 – page 31
(Ulster Bank did not appear on the Top Ten list in 2018)
