# "ptsb will pay the penalty for its mortgage mistakes"



## Brendan Burgess (8 Feb 2015)

A very hard hitting piece from Brian Carey in today's Sunday Times.

_It may also face a Central Bank sanction. The biggest cost of all will be to the bank's reputation.
...
The decision to contest the FSO and the High Court ruling, and put the customers through the wringer, not mention financial hardship, was taken under the current regime's watch. This is the appalling aspect._


----------



## Brendan Burgess (9 Feb 2015)

_Here is the full article. Reproduced with permission. _

Banking, only better, is the rather unfortunate slogan of Ireland's smallest domestic banking franchise, the taxpayer-bailed-out *Permanent TSB*. Pursuing your customers all the way to the steps of the Supreme Court is hardly a ringing endorsement of a pro-consumer bank.

Better?This weekend it could hardly look worse.

Last week, PTSB abandoned a Supreme Court challenge against the decision of the Financial Services Ombudsman to uphold a complaint by two borrowers against the bank, just days before it was due to be heard. The trouble is far from over for the bank. Apart from paying compensation to the borrowers — and a flood of copycat complaints is expected — PTSB is facing an investigation by the Central Bank.

The affair has its roots in the dark days of the bust. When the ECB decided to increase interest rates in 2007, the PTSB customers involved switched to fixed-rate mortgages from their tracker mortgages. The contracts stated that, at the end of the term of the fixed-rate mortgages, the borrowers could switch to a standard variable or tracker mortgage. If the customers switched before the end of the fixed term, as is standard practice in the industry, penalty interest is applied.

Before the terms of the mortgage expired, in 2009, and as the ECB rates plummeted, some customers sought to revert to break the fixed-rate contract. Due to a "systems error", the bank could not calculate the penalty on the fixed-rate contract, so it offered a no-penalty break. The no-penalty break became known on consumer websites, and some 2,000 customers bailed out of the fixed rate. They were shifted on to a variable rate for the remainder of the term. The customers say they were not informed at this time that they would not be able to revert to their trackers at the end of the term. Instead, the customers were kept on the Permo's market-topping standard variable rates.

Both the FSO and the High Court found that the bank failed to explain adequately to its customers the implications of breaking the fixed-rate contract. According to evidence in the High Court, the computer error cost the bank €33m. That is the sum PTSB had to forgo in penalty interest on early breakers. It is now potentially facing an equal bill on the repayment of additional interest charged to these customers above the tracker rates. It may also face a Central Banksanction.

The biggest cost of all will be to the bank's reputation.

There will be lots of old blow that the original decision on the case in question took place before current management arrived. The decision to contest the FSO and the High Court ruling, and put the customers through the wringer, not to mention financial hardship, was taken under the current regime's watch. This is the appalling aspect.

Was the tactic simply to wear the unfortunate customers down, or push other complaints beyond the six-year time limit at the FSO? Did the bank firmly believe that right was on its side? Neither interpretation is terribly flattering. Clearly the intention was to stem any liability, yet that has backfired. It has been portrayed that the case was dropped under the threat of the Central Bank probe. The bank invited this calamity upon itself. It found itself in a hole, and just kept digging.


----------



## Bronte (9 Feb 2015)

Brendan Burgess said:


> Was the tactic simply to wear the unfortunate customers down, or push other complaints beyond the six-year time limit at the FSO? Did the bank firmly believe that right was on its side? Neither interpretation is terribly flattering.


 
Well done _*Brian Carey*_ of *The Sunday Times* for a not holding his punches.

And finally it seems the Central Bank is actually going to wake up and defend the Irish people, the banks customers.  We are all of us obliged to bank, we have no choice.  There is no real consumer choice in banking.  They act like a Cartel.  They are arrogant.  They are mean.  They are unkind.

Personally there is no way I believe there was a 'systems error' that meant the PTSB lost the interest.  What I do not understand is how they can time and again get away with this.

The very same 'system error' is in a letter I have in relation to my own case with Ulster bank and the FO.

Banks are only about making money and all those lovely ads on the radio about customer care is nonsense.  Anyone who has telephoned or dealth with customer service in a bank will very quickly come to realise this.  There systems and answers are deliberately designed to twart you, to delay you, with obfustication to the fore.

They treat the FO in a cavaliar fashion.  His office holds no fear for the banks.  The fact that a customers only redress if they lose with the FO is only the High Court.  No mere Irish citizen can hope to take a case.  I do so admire those two PTSB customers who were so very brave to take the case.  The High court is the way to financial ruin.  So much for justice for all.  Even taking a case to the FO the odds are stacked against you.

Will the PTSB now remedy the mortgages of the customers who did not take a case to the FO within the time limit of the statute of limitations.  If they don't then the Central Bank should force them to.

As for the Central Bank, it's about time you acted.  And how about you stop putting out reports with an incorrect interest rate as has been highlighted by *Brendan Burgess* on here and by *Charlie West*on in the *Irish Independant*.

And also well done to *Weston* who of late has been more strident in his articles on banks.

There is a poster on here *Padkiss*, I see he was mentioned in one of the articles on this issue, as he has quite a few cases in relation to the PTSB.  I so regret that I didn't know about him when I took my own case.


----------



## Gerry Canning (9 Feb 2015)

With you 100% on this Bronte. Please keep us posted on your Ulster claim.

I also worry, like you, that the Statute of Limitations ,which was recommended to be changed by Law Reform Commission but was not changed by our present Government, will neatly be used to stall other Mortgage claims.

I worry more , given the history of Bank protection that said Statute will be used to (hide) more costly claims against Banks eg Payment Protection (PPI) claims. Since ppi comes in @2 Billion.So 30 million is small change.
It reads well to have our Central Bank actually acting , but this smells of such a blatant issue even our Bank friendly folk in Central Bank have to act.

The New PTSB !

I have nothing but praise for the 2 Joe Soaps who braved the daunting prospect of High Court.
We do not have access to Court for all our citizens ,we simply have wallet type law.

I suppose it is hopeful to see Central Bank acting this time.


----------



## Brendan Burgess (9 Feb 2015)

Bronte said:


> I do so admire those two PTSB customers who were so very brave to take the case.



As it happens, they weren't that brave at all. 
They went to the Ombudsman.
The Ombudsman ruled in their favour.
ptsb took a case against the Ombudsman to the High Court
ptsb appealed the decision to the Supreme Court 

The dispute was between ptsb and the Ombudsman. 

The two couples involved were just passengers.

Brendan


----------



## Bronte (9 Feb 2015)

I missed that bit.  Lucky passengers then.  Therefore if little guy wants to appeal the FO to the High Court the little guy pays.  But if the bank takes the case the FO pays the court costs.  What a fantastic system.


----------



## Brendan Burgess (9 Feb 2015)

I am not so sure that they considered themselves lucky.  They have had to wait 5(?) years to get their tracker back and a refund, but they didn't have to worry about paying out €100,000 in legal fees.


----------



## Bronte (9 Feb 2015)

Yes I suppose one shouldn't say lucky when you've been messed around for so many years.  It could also have meant financial headaches as you're overpaying.  In addition you're at a loss each year of a lump sum.  It could have very big implications in your life.


----------



## Miakk (9 Feb 2015)

Bronte, I have recently joined AAM and have noted your posts, as I have am in a similar position to you, I.e. Complaint re tracker with UB in 2009,  FSO ruled against me in early 2012.

High Court appeal was way beyond my means, added to the personal toll the whole process had taken on me.  I naively had faith in the system before I undertook the whole FSO process on my own - like you, I was not aware that there was anyone who could help me through it, or even that I would require help.  The net result was no change in my mortgage status yet a whole lot of personal turmoil and ongoing stress for me as a result of it.

I commented on another thread the other day how this PTSB issue must surely raise questions about the FSOs decisions, as there are a number of posters on other threads with the same issue as the court action, but whom the FSO ruled against.


----------



## Bronte (9 Feb 2015)

Totally understand about the personal toll of taking them on.  It was not worth it.  I got a couple of cheques which in no way compenstated me for the annoyance of the whole thing.

The banks are using the FO's office as their complaints department, in my opinion. With the odds of winning stacked decidedly in their favour.


----------



## Darragh (3 Jul 2015)

Brendan Burgess said:


> A very hard hitting piece from Brian Carey in today's Sunday Times.
> 
> _It may also face a Central Bank sanction. The biggest cost of all will be to the bank's reputation.
> ...
> The decision to contest the FSO and the High Court ruling, and put the customers through the wringer, not mention financial hardship, was taken under the current regime's watch. This is the appalling aspect._



5 Months later, and still no word from PTSB on its proposals to rectify this situation....... 5 MONTHS....


----------

