Tracker Mortgage Decision Reference 2022-0148

• Case Outcome: Rejected
• Subject Matter: Tracker Mortgage
• Reference: 2022-0148
• Date: 22 April 2022
• Finantial Sector: Banking
• Conducts Complained Of: Failure to offer a tracker rate throughout the life of the mortgage

Decision Ref:

2022-0148

Sector:

Banking

Product / Service:

Tracker Mortgage

Conduct(s) complained of:

Failure to offer a tracker rate throughout the life of

the mortgage

Outcome:

Rejected

LEGALLY BINDING DECISION

OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

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

Provider. The mortgage loan account was secured on the Complainants’ buy-to-let (“BTL”)

property.

The mortgage loan amount was €170,000.00 and the term of the loan was 25 years. The

Mortgage Loan Offer Letter dated 14 December 2004 detailed the interest rate as a

tracker interest rate of ECB + 1.30%, which was subsequently reduced to ECB + 1.20% by

agreement with the Provider.

The Complainants’ Case

The Complainants detail that they had a mortgage loan account with the Provider which

“was provided on a tracker basis at inception”.

The Complainants state that they entered into an Agreement to Amend Mortgage Loan

Offer Letter in June 2016 to amend the interest rate on the mortgage loan from a tracker

rate of ECB + 1.20% to a BTL variable interest rate of 2.20%. The Complainants state that

they felt that they “had no choice” but to sign the Agreement to Amend Mortgage Loan

Offer Letter dated 28 June 2016.

- 2 -

/Cont’d…

The Complainants question how it could be in their “best interests to remove a market

leading interest rate to a less favourable” and higher interest rate given it was evident that

they were experiencing “strained cash flow at that time”.

The Complainants are of the view that the Provider is “being disingenuous” and that the

only “rational explanation” to explain why the Complainants would execute a financial

agreement that is “clearly less favourable to their position” is that of “undue influence or

coercion (via enforcement threats).”

The Complainants note that the Provider “neglects to outline that the Bank were

aggressively threatening the complainants with enforcement absent their consent.” The

Complainants detail that after the Agreement to Amend Mortgage Loan Offer Letter

issued, they were contacted by an agent of the Provider “and threatened that they had

only two options either sign the document immediately (today) or the Bank were going to

initiate enforcement and appoint a Receiver over the property.” The Complainants refute

the Provider’s assertion that it was their choice to accept the offer. The Complainants state

that it is apparent that the Provider “undoubtedly exerted undue influence on them under

the then live threat of enforcement.” The Complainants submit that the Provider’s internal

notes of a telephone call on 21 June 2016 do not “relate in any way to the call received by

the complainants from [representative of Provider]”. The Complainants are of the view that

the person who recorded the telephone call on the Provider’s internal system is not the

same person who spoke to the Complainants on 21 June 2016. The Complainants note that

it is “convenient” that the telephone recording cannot be located by the Provider.

The Complainants assert that the Provider “has engaged in duplicitous tactics to remove a

loss making product favourable to customers by using their misfortune to entrap them into

executing amended agreements more favourable to the provider by way of structural

adjustments”.

The Complainants refute the Provider’s assertions that it complied with the provisions of

the Consumer Protection Code 2012 (CPC 2012) in circumstances where they maintain

that the Provider “aggressively” unduly influenced them.

The Complainants state that they are “dismayed” at the Provider’s response which “served

to only compound their frustration” by using “obfuscation and deception” to convince this

Office that the Provider complied with its obligations. The Complainants submit that the

Provider has attempted to present the Complainants as “irresponsible customers whom, by

their own choice, executed an agreement that was clearly less favourable to them.”