Tracker Mortgage Decision Reference 2019-0045

• Jurisdiction: Ireland
• Case Outcome: Upheld
• Date: 11 February 2019
• Year: 2019
• Conducts Complained Of: Failure to offer appropriate compensation or redress,
• Finantial Sector: Banking
• Reference: 2019-0045

Decision Ref:

2019-0045

Sector:

Banking

Product / Service:

Tracker Mortgage

Conduct(s) complained of:

Failure to offer appropriate compensation or

redress CBI Examination

Outcome:

Upheld

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

Background

This complaint relates to a mortgage loan account held by the Complainants with the

Provider and the overcharge of approximately €96,000 in interest by the Provider on the

loan account.

The Complainants’ mortgage loan account was considered by the Provider under the

Provider’s mortgage redress programme.

An offer was made to the Complainants by the Provider on 28 July 2015 as part of the

mortgage redress programme in relation to admitted failures of the Provider regarding the

Complainants’ Mortgage Loan Account, as follows;

“On 01/11/2008 [the Complainants] broke from the fixed interest rate period

which applied to [the Complainants’] mortgage account at that time. This break

took place before the scheduled maturity date of the fixed interest rate period.

In breaking from [the Complainants’] fixed interest rate period early, [the

Complainants] lost a contractual right to avail of a tracker mortgage at the

scheduled maturity date of the fixed interest rate period. However at the time

that [the Complainants] broke from [their] fixed interest rate period, [the

Provider] did not inform [the Complainants] that [they] would be unable to avail

of a tracker rate mortgage at the scheduled maturity date of the fixed interest

rate period.”

- 2 -

/Cont’d…

In the offer made to the Complainants in 2015, the Provider proposed to provide redress to

the Complainants by returning them to the tracker rate of interest and compensate the

Complainants as follows;

1) Tracker Rate Mortgage Option

“the opportunity to move to the tracker rate mortgage you would have been entitled

to move to at the maturity of your fixed interest rate period if you had chosen to do

so. That rate will reflect the loan conditions of your mortgage with [Provider]. The

rate of interest charged on this product is based on the ECB Refinancing Rate (the

“ECB Rate”) plus a margin of 0.75% (in practice this equals a tracker rate today of

0.800%)”.

(1) Redress and Compensation

Part One – Balance adjustment and possible net refund to you

“We have established that your current loan balance would have been €553,000.96,

which is €43,473.27 less than your loan balance at present.

We have calculated a net refund of overpayments due to you of €52,852.19”

Part Two – Compensation

“This payment will include two elements;

Firstly, it will include a payment of €9,478.63 in recognition of our failure in this

matter.

Secondly, it will include €400.00 (including VAT) which you may use to pay for

independent advice if you chose to seek advice in respect of this letter. You will have

full discretion as to the use of this money”

A mortgage rate instruction form and payment authorisation and account adjustment form

were signed by the Complainants accepting the Provider’s proposal in relation to the tracker

interest rate on 07 August 2015.

The Complainants did not accept the compensation offered. Therefore, the conduct being

complained of and that is being adjudicated on by this office is that the Provider has not

offered adequate compensation to the Complainants by consequence of the Provider’s

failure in relation to their mortgage loan account.