Tracker Mortgage Decision Reference 2021-0222

Case OutcomeSubstantially upheld
Subject MatterTracker Mortgage
Reference2021-0222
Date28 June 2021
Conducts Complained OfFailure to offer appropriate compensation or redress CBI Examination
Finantial SectorBanking
/
Decision Ref:
2021-0222
Sector:
Banking
Product / Service:
Tracker Mortgage
Conduct(s) complained of:
Failure to offer appropriate compensation or
redress CBI Examination
Outcome:
Substantially upheld
LEGALLY BINDING DECISION
OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN
This complaint relates to two mortgage loan accounts held by the Complainants with the
Provider and an overcharge of interest in the amount of €39,370.94 on the mortgage loan
accounts. The mortgage loan accounts that are the subject of this complaint were secured
on the Complainants’ buy-to-let (“BTL”) property.
The Complainants’ mortgage loan account ending 7927 was drawn down in April 2003. The
loan amount was €200,000 and the term of the loan was 25 years.
The Complainants’ mortgage loan account ending 2183 was drawn down in August 2006.
The loan amount was €157,500 and the term of the loan was 25 years.
The Complainants’ mortgage loan accounts ending 7927 and 2183 were considered by the
Provider as part of the Central Bank directed Tracker Mortgage Examination (the
“Examination”). The Provider identified that an error had occurred on both mortgage loan
accounts and as such they were deemed to be impacted under that Examination.
The Provider wrote to the Complainants by way of letters dated 9 December 2016 advising
them of the errors that had occurred on their mortgage loan accounts.
- 2 -
/Cont’d…
The Provider detailed the circumstances that caused the “failure to happen” in respect of
each mortgage loan account as follows:
“Your mortgage account had a ‘Buy to Let’ rate, which could not be more than
1.50% over the ECB rate. At a point during your mortgage the interest rate moved
to a different rate type. While the interest rate that you moved to was lower for
your benefit at the time, we didn’t tell you that as that interest rate moved you
might end up paying more than 1.50% over the ECB rate.”
With respect to the effect of the failure on the mortgage loan accounts the Provider
outlined as follows:
What does this mean for you?
Now that we have completed the detailed review of your mortgage account and
reduced your interest rate, we have been able to calculate the redress and
compensation that is due from 31/10/2008, which was when your account was first
impacted.”
The Provider made an offer of redress and compensation in letters dated 9 December
2016 to the Complainants for each mortgage loan account, as follows:
Account ending 7927
Account ending 2183
Redress covering;
- Total interest overpaid
- Interest to reflect the time
value of money
€19,986.97
€22,398.20
Compensation
€2,232.54
€2,304.67
Independent professional advice
payment
€615.00
€615.00
Total
€22,834.51
€25,317.87
The balance of mortgage loan account ending 7927 was adjusted by €9,780.28 and the
balance of mortgage loan account ending 2183 was adjusted by €8,330.76.
Both mortgage loan accounts were restored to a tracker interest rate of ECB + 1.50% in
August 2016.
- 3 -
/Cont’d…
In March 2017, the Complainants appealed the redress and compensation offerings to the
Independent Appeals Panel. The basis of the Complainants’ appeal was the level of
compensation offered by the Provider. The Appeals Panel decided on 27 July 2017 that the
Complainants were unsuccessful in their appeal for the following reasons:
“The Panel has carefully considered the appeal of [the Complainants] in accordance
with the Terms of Reference and Panel Rules. The Panel considered all information
available, the Panel decided that, in the circumstances, it did not agree with [the
Complainants] that the claimed losses arose as a result of the failure by the Bank to
apply the correct interest rate.
In coming to its decision, the Panel sought further information from [the
Complainants] which unfortunately was not forthcoming. There was therefore a
lack of detailed evidence that the claimed losses arose as a result of the application
of the incorrect interest rate.
Pursuant to the Terms of Reference and Panel Rules, the Panel, in reaching its
decision, considered all information available to it and decided that it did not agree
with [the Complainants] that the non-financial losses claimed by them arose as a
result of the failure by the Bank to apply the correct interest rate.”
As the Complainants have been through the Provider’s internal appeals process, this
office was in a position to progress the investigation and adjudication of the complaint.
The Complainants’ Case
The Complainants submit that the redress and compensation offered by the Provider has
not placed the Complainants in the financial position that they would have been in had the
overcharging of interest on their mortgage loan accounts not occurred. They detail that
they are unhappy with the “Redress process” as it did not allow for their “full
participation”.
The Complainants submit that the Provider overcharged them during the impacted period
“up to an extra €800 per month totalling €60,000. This had the effect of causing a shortfall
in the money [they] had available so [they] had to fund the extra mortgage payments from
alternative sources … leaving [them] cash starved for the period”. The Complainants
further outline that the overcharge occurred “during a very harsh recession”. They have
set out that at this time they were in negative equity and unable to sell their property.

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