Are there grounds for a legal challenge to high SVR?

V

voriax

Guest
Hi Brendan,
I contacted my local TD, taken a case to the Ombudsman, etc...
In the last letter from the Ombudsman (21 Dec.) PTSB "has been asked to furnish its response within a period of 20 working days" to my complaint. Up to now I did not get any response yet.

Is there no legal means to deal with PTSB?
I am a lawyer, but maybe in "Financial Regulator's - Consumer Protection Code August 2006" is some provision which would apply to the case? When PTSB increased its variable rate 6 times in 2 years (by 3% combined) and there were 2 increases (only by 0.5 %) of ECB interest rates in the same period.
When, at the same time, PTSB variable rate at 6.15 % was at least 2.5 % higher then its tracker rates and variable rates of its competitors, is it not in breach of Chapter 1.1 of the Code? (integrity of the market)


CHAPTER 1
GENERAL PRINCIPLES
A regulated entity must ensure that in all its dealings with customers and within the context of its authorisation it:
1 acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market;
2 acts with due skill, care and diligence in the best interests of its customers;
3 does not recklessly, negligently or deliberately mislead a customer as to the real or perceived advantages or
disadvantages of any product or service;
4 has and employs effectively the resources and procedures, systems and control checks that are necessary for
compliance with this Code;
5 seeks from its customers information relevant to the product or service requested;
6 makes full disclosure of all relevant material information, including all charges, in a way that seeks to inform the
customer;
7 seeks to avoid conflicts of interest;
8 corrects errors and handles complaints speedily, efficiently and fairly;
9 does not exert undue pressure or undue influence on a customer;
10 ensures that any outsourced activity complies with the requirements of this Code;
11 without prejudice to the pursuit of its legitimate commercial aims, does not, through its policies, procedures, or
working practices, prevent access to basic financial services; and
12 complies with the letter and spirit of this Code.
 
Hi voriax

I missed this when you posted it first.

I don't know if there is a legal case. I think your approach to the Ombudsman is a good first step. Keep us informed of how you get on.

My gut feel is that the campaign will succeed through political pressure and persusasion. If it fails, then maybe those affected could take legal advice. However, a court case would take years to be heard.
 
I was wondering recently, given that both AIB and PTSB are now owned by the state, (although both institutions are separate entities and have been taken over as going concerns).
Could an anti-competition case be brought against the state for the difference in SVR's between the banks?
 
Voriax
You have highlighted one line from the document, suggesting that this line might be the basis of your case.
The line is "1 acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market;".

Are you focussing mainly on the phrase "in the best interests of its customers"?

I'm not a lawyer, but I'm guessing that the phrase "the integrity of the market" refers to an obligation on any financial institution to attempt to make a profit in order that it can continue to maintain a presence in the market place, and that the defence would be that this obligation somehow must be balanced with the best interests of the customer. In the current situation the financial controller of a bank can make a very strong case for increasing margins, however unpleasant that may be.
 
Lost my case with the Ombusman

We have a variable mortgage with Permanent tsb.
Up to June 2009 our rate was parallel to ECB rates, from June 2009 to February 2011, the rate increased from 3.4% to 5.65% without any change of ECB rates. During that period the Bank effectively charged us whatever they wanted.
One of our main points in the complaint was the Consumer Protection Code, 2006.


"Finding
...The Complaints were given the opportunity to see the Bank's response and the schedule of evidence and the Complaints have made further submission to the Financial Services Ombudsman to the effect that the Bank has failed to comply with the Consumer Protection Code of 2006, which I note has since been replaced..."

Does anyone know when it was replaced and what replaced it?

Since the case is lost with the Ombudsman, we can only appeal it to the High Court within 21 days. To be honest I wouldn’t like go to the Court for a few thousand euros, on the other hand I don’t agree with findings of the Ombudsman.
Does anyone know how an appeal to the High Court looks? Can I represent myself? Could I get somewhere a free legal aid to build an appeal?
Voriax
 
Your in the same position as every other Stardard Variable Rate mortgage holder in the country with PTSB. You and hundreds of others have got the same reply from the Ombudsman... "rates can go up as well as down"! Join the cause, start annoying local politicians etc.. If you won your appeal, the flood gates would open!
 
Hi voriax

The CPC has evolved. There are different versions, but the point you highlight would be the only point where you might have succeeded.

Well done on trying, but as it was not a tracker mortgage, so there was no obligation on them to track the ECB rate.

It is unlikely that the High Court would interfere with the judgment of the Ombudsman unless there was a clear error of law or procedure.

Brendan
 
Hi voriax

The most up to date CPC is January 2012 and 75% of the content has changed since the previous 2006 CPC
 
Hi,
Got an answer from Legal Aid Board.
"...you have been deemed financially eligible for legal services. This does not necessarily mean that a solicitor will act for you in court proceedings as this will also depend on the merits of the case.
Owing to the demand for legal services at the law centre, we are not in a position to offer you an appointment at the moment. The waiting period for an appointment is approximately four months..."
After that four months the case will be probably rejected, however I am not that stupid to go to the court on my own.

The bank says:
[FONT=&quot]"The interest rate that permanent tsb charges is dependent on the cost of funding which comes from a combination of interest paid on deposits, money market rates and European Central Bank (ECB) rates"[/FONT]. In August 2011 our rate reached 6.15 %. We understand that at the same time the Bank’s cost of funds were 1.5 % from the ECB and the government and their highest deposits rates were about 4.2 %.

I am not surprised that the bank will do whatever to save their business, I am very angry that it was allowed by Irish Financial Authorities.

Since the bank treats me like a hostage or a prisoner, not as a consumer I do not feel morally obliged to repay the loan.
 

Since the bank treats me like a hostage or a prisoner, not as a consumer I do not feel morally obliged to repay the loan.

Hi voriax

The problem is that you are legally obliged to repay the loan.

A few of the borrowers have been actively lobbying their TDs and going to the press with their story. Get involved with this first rather than refusing to repay your loan.

Brendan
 
Hi Brendan,
I know I am legally obliged to repay the loan. I am not going simply to refuse to repay. I would like to examine other option, going to UK, loosing my job temporarily, etc...

There is about 75 000 households on ptsb variable mortgage, only a few complained (there is about 100 on facebook). If you divide it by number of constituencies it will make a couple for a TD. Nobody will bother for potential 2 or 5 votes. There are more pressing issues for them now, household charge … nobody cares that last year I paid 25 times more than 100 e house hold charge.

Ptsb beautifully does in the media (e.g. saying that increases of variable rates affected mostly customers with very small loans), there is not much chances against their p.r. Besides we got a reduction by 0.5 % and an apology, so what more we want...
I will not make decisions in anger or as a protest. The term of my mortgage is about 30 years, it is in massive negative equity. The bank can charge me whatever they want, how can I know that in the future ptsb will not have a go again (charge me 10 or 20 %). The apologies from the bank do not bring back my trust to the bank, I am afraid it is just another p.r. exercise.
I came to the bank to do business, and I expected a reasonable price for its products (they were in line with rest of the marked).
Regards
 
Back
Top