A COUPLE lost their High Court challenge to the Financial Services Ombudsman’s rejection of their complaint about a €16,500 fee imposed for moving from a fixed-interest rate term on their mortgage.
Jacqueline and James McEvoy claimed that as a result of a phone conversation with a customer service agent of Permanent TSB in August 2008, they believed they would only have to pay €100 to break out of a five-year fixed-term rate, and had entered into the term on that basis.
When they tried to break out of the term, they were advised by the bank it would cost €16,500, they complained. Permanent TSB contended the McEvoys knew the conditions of the fixed-rate term and that the €100 was an administration fee.
The couple complained to the ombudsman and, when he rejected their complaint, they appealed to the High Court.
In his decision last year, the ombudsman said that having reviewed a transcript of the telephone call with the Permanent TSB agent, he was satisfied the McEvoys were advised that any fee that might apply if they were to move from their fixed rate of interest depended on interest rates and the length of time before the expiry of the fixed rate.
The couple were also advised that an administration charge of €100 would also apply to the switch from fixed rate, he said.
The ombudsman concluded he was satisfied the McEvoys were aware a possible breakage fee could be applied, and said their own mortgage papers stated how that would be calculated.
While accepting the customer service adviser could have provided a more accurate and precise explanation of the breakage fee in the August 2008 conversation, he took the view the couple were aware, based on documentation previously received, of the salient features of how a breakage fee is calculated. Dismissing their appeal yesterday, Mr Justice Paul Gilligan said the reality of the situation was the McEvoys at all times had within their power or possession the conditions of their mortgage and, in particular, the condition relating to fixed-rate loans.
Whatever view one may hold of the Permanent TSB agent who dealt with the telephone query, the reality was that the ombudsman had full access to the transcript of that call and had taken its content into account in reaching his decision, the judge said.
Mr Justice Gilligan said an issue of “common sense” arose as the couple were dealing quite extensively with their mortgage and had changed its terms at least three times prior to August 2008.
The case arose after the McEvoys applied for a mortgage in 2004. They got a loan on a fixed interest rate and opted for a two-year fixed rate after that. In August 2008 they opted for a five-year fixed rate of interest.