Ulster Bank: end your legal battle with account holders over their right to a tracker rate

Last week I got details of a solution for 4,500 customers of Ulster Bank’s so-called offset mortgage accounts, which will offer goodwill payments averaging €12,650 and cost the bank €58 million to settle.

That’s good news for those account holders. The bad news is that Ulster Bank continues to fight to the bitter end on potentially another 5,300 mortgage accounts over their entitlement to a tracker mortgage.

An appeal by Ulster Bank against a High Court ruling that upheld two home loan customers’ entitlement to tracker mortgage refunds and compensation will proceed before the Court of Appeal next February.

At least 5,300 loan accounts may be affected by the appeal, with other lenders potentially affected as well, the bank submitted. Whatever the Court of Appeal decides, the lender said, there is likely to be a further appeal to the Supreme Court.

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The latest efforts by Ulster Bank to have a decision from the Financial Services and Pensions Ombudsman (FSPO) overturned make for astounding reading.

This bank firstly challenged the matter as part of a complaint in the FSPO process and then took it to the High Court, where it failed. And it now planning to exhaust the appeals process.

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I am not a solicitor nor a legal expert, and I will quickly be told they have a right to challenge the matter in this way, but their customers have rights also. Customers have a right to not to have to wait for the correction of their accounts.

I sat in the High Court for some of the days of the hearings and what I saw concerned me. I counted 21 boxes of evidence for essentially three mortgage accounts and I wondered, when did mortgages get this complicated?

[ Ulster Bank down to final €200m of deposits ]

The matter that is central to this case is Ulster Bank’s flexible transfer form, which has identical wording to tracker loan offers, many of which had to be corrected also. The wordings are not only identical, but so is the purpose of those words for the basis of those accounts – namely, the accounts that began on tracker and those that moved to tracker.

It is only post the 2008 financial crash that Ulster Bank (and indeed other lenders) tried to get out of these clear wordings.

In March 2021, the Central Bank of Ireland fined Ulster Bank €37.7 million for “serious failings” in the treatment of tracker customers holding 5,940 mortgage accounts between August 2004 and April 2020. Ulster Bank admitted in full to 49 separate regulatory breaches and was required to pay more than €128 million in redress, compensation and account balance adjustments to the customers who were impacted.

Ulster Bank appears to hope the very same wordings used will have an entirely different outcome for the 5,300 mortgage accounts currently in scope.

Ulster Bank wants to challenge and exhaust the legal process in its attempt to prevent the correction of these accounts. It stated in its presentation to the courts “that there were exceptionally pressing and urgent” circumstances in light of its withdrawal from the Irish market.

The bank chooses to ignore the exceptionally pressing and urgent circumstances of its customers affected by this carry-on. I sat in many meetings over recent years regarding culture changes at this bank, where assurances were given by Ulster Bank that it would put its customers’ interests to the fore of its policies and practices.

It is not doing so here and is interested in getting an outcome that suits its aims only, to the detriment of the account holders.

If Ulster Bank is correct – and I don’t believe it is – why did it not give any warnings to customers that in fixing the interest rate on their account, they were also giving up their tracker rate? This warning should have been given before fixing the rate of interest on a mortgage.

I have customers who are waiting on the outcome, despite their case being upheld by the FSPO and their complaint being successful as far back as June 2021. Yet they have not had their situation corrected.

[ Ulster Bank and the mystery of the shifting tracker repayments ]

This is the sting of a dying wasp – and in my view it is the customers who are being stung. Ulster Bank has little or no regard for its customers, nor indeed for the process of the FSPO, which is what is also being challenged here.

While legally allowed, the challenges attack the very reason the FSPO was established originally: “To address the perceived imbalance of the consumer when challenging its financial provider.”

Enough is enough from Ulster Bank. Those in power within it should stop listening to its legal teams (who get paid either way) and think of its customers in its final days in this country.

It would be the right thing to do and live up to the original promise on the form that stated the margin was for the “life of the home loan”. Life should mean life in this case.

Correct it now without any further delay – that’s my message to Ulster Bank, and also, accept the position the bank has been informed of on more than one occasion. It should remember that behind the 5,300 mortgage accounts are individuals and families who are left waiting with little or no information.

It's not good enough given all that has occurred.

This is an opportunity for Ulster Bank to learn from its past, to cease this current campaign and, finally, to put its customers first. It has done so for the offset account holders, but has not done the same for these unfortunate people. It is all wrong and sends an appalling message to the customers.

Padraic Kissane is a financial adviser