Tracker Mortgage Decision Reference 2020-0321

• Jurisdiction: Ireland
• Case Outcome: Rejected
• Reference: 2020-0321
• Year: 2020
• Date: 24 September 2020
• Conducts Complained Of: Failure to offer appropriate compensation or redress CBI Examination
• Finantial Sector: Banking

Decision Ref:

2020-0321

Sector:

Banking

Product / Service:

Tracker Mortgage

Conduct(s) complained of:

Failure to offer appropriate compensation or

redress CBI Examination

Outcome:

Rejected

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 an overcharge of interest in the amount of €19,248.78 on that mortgage loan

account. The mortgage loan was secured on the Complainants’ Principal Private Residence.

The Complainants’ mortgage loan account was considered by the Provider as part of the

Central Bank directed Tracker Mortgage Examination (the “Examination”). The Provider

identified that a failure had occurred on the mortgage loan account and as such that

mortgage loan account was deemed to be impacted under the Examination.

The Provider contacted the Complainants on 12 December 2017 advising them of the error

that had occurred on their mortgage loan account. The Provider detailed how it “got

things wrong” as follows;

“In our review, we found that when you moved to a fixed rate from a tracker

rate we failed to provide you with sufficient clarity as to what would happen at

the end of that fixed rate. Because of this, you may have had an expectation

that a tracker rate would be available to you at the end of the fixed period.

The language used by us in your documentation may have been confusing as

to whether it was a variable interest rate which varied upwards or downwards

- 2 -

/Cont’d…

tracking the ECB Rate or a variable interest rate which varied upwards or

downwards at our discretion.”

With respect to the effect of the failure on the mortgage loan account the Provider

outlined as follows;

“How this failure affected you

As a result of [the Provider’s] failure, we can confirm that you were charged

an incorrect interest rate between 14 Mar 2011 and 28 Nov 2017”.

The Provider made an offer of redress and compensation to the Complainants by letter

dated 12 December 2017. The offer of €23,272.92 was made by the Provider to the

Complainants and comprised of the following;

1. Redress of €20,249.02 covering;

 Total interest overpaid by the Complainants of €19,248.78

 Interest to reflect time value of money of €964.24

2. Compensation of €2,024.90 for the failure on the mortgage loan account.

3. Independent Professional Advice payment of €1,000.00.

The Provider applied a tracker interest rate of ECB + 0.85% to the Complainants’ mortgage

loan account on 29 November 2017.

The Complainants signed the Acceptance Form on 16 December 2017 and the amount of

€23,272.92 was paid into the Complainants’ nominated bank account.

In January 2017, an appeal was submitted to the Independent Appeals Panel by the

Complainants. The Appeals Panel decided on 1 February 2018 that the appeal was upheld

and awarded additional compensation of €1,000.00 to the Complainants. The key factors

in determining the decision by the Appeals Panel were as follows;

 “The Panel took into account the level of overpayment by the customers

 The fact that the customers were engaging with the bank in questioning the

rates of interest being applied to their account