PTSB accused of holding up tracker redress across the banking industry

Permanent TSB has been accused of holding up redress and compensation for thousands of customers affected by the tracker mortgage controversy not just in its own bank but across the industry by challenging a High Court ruling back in 2012.

The bank appealed the court’s judgment in relation to four customers, who had taken a case against PTSB after they were wrongly denied the option of a tracker rate at the end of a fixed-rate term.

PTSB pursued its appeal against the High Court ruling, which had affirmed an earlier judgment by the Financial Services Ombudsman, for three years before eventually dropping it when the full extent of the tracker mortgage scandal began to emerge in early 2015.

At the Oireachtas finance committee, Sinn Féin's Pearse Doherty said to PTSB chief executive Jeremy Masding that "up to 30,000 customers were impacted because of your selfish decision to appeal this to the Supreme Court".

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You have recorded telephone calls. They were breaking down on the phone. You were trying to take their home from them as you were robbing them

The Central Bank and other agencies were blocked from initiating a wider examination of the tracker mortgage issue because of the pending legal challenge, Mr Doherty said.

“Not only did you impact on thousands of customers, you impacted on the lives of tens of thousands of customers who couldn’t get redress at that point in time because [your bank] decided, in your interest, to appeal this to the Supreme Court,” he said.

‘Level of advice’

Mr Masding, who took up his current role in the bank in 2011, said the bank pursued the case in response to a concern that the High Court ruling “might change fundamentally the level of advice that retail banks were required to provide when acting on customer requests”.

“After the Central Bank commenced its enforcement investigation and following PTSB’s detailed analysis it became clear that we were dealing not with four customers, as you said, but with a broad customer welfare issue,” he said.

“That’s why we withdrew our appeal and that’s why within six months we had redressed 1,372 customers,” Mr Masding said.

But in an increasingly heated exchange, Mr Doherty said the bank was aware there were more than four customers affected by the issue during the period of its appeal and that its subsequent suggestion that the whole tracker issue stemmed from a “systems failure” was bogus.

“I’ve heard from them. I’ve sat in their kitchens, I’ve listened to them. You have recorded telephone calls. They were breaking down on the phone,” he said.

“You were trying to take their home from them as you were robbing them,” Mr Doherty said.

Acted correctly

But Mr Masding insisted the bank had acted correctly when the full extent of the issue became clear and that its redress programme established the blueprint for how the industry has responded to date.

He also said PTSB was the only bank to put in place a pause on all legal actions in respect of mortgage arrears while the tracker issue was ongoing.

A total of 1,979 PTSB customers have been caught up in the tracker mortgage controversy, which saw thousands of customers wrongly switched off low-cost tracker mortgage products or incorrect interest rates applied to their accounts.

Earlier, Mr Masding told the committee that in 31 cases, customers lost their properties, of which 12 were private dwellings, and 19 were buy-to-let properties.