# NI judge finds that Bank of Scotland/Tanager calculating arrears incorrectly



## Brendan Burgess (19 Dec 2014)

There was a very important case in the High Court in Northern Ireland where Bank of Scotland was found to be calculating the arrears incorrectly.  It's hard to follow, but you can read about it here: 

Bank of Scotland held to account

Bank of Scotland was making the exact same error which Irish Nationwide had made.

I presume that BoSI made the same mistake here, but I would like to see a set of statements from someone in arrears to check it out. 

*You have not been overcharged - it's just that your arrears balance may have been overstated

*As BoSI does not charge interest on arrears, you have not been overcharged. 

But if they sought to repossess your home, the figures they used for arrears may well have been wrong. 

Brendan 
Bank of Scotland held to accoun 
Bank of Scotland held to account


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## Bridie (8 Jan 2015)

I'm in the middle of fighting this exact case - its before the courts and thus very timely.


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## Bridie (8 Jan 2015)

So, I have statements, and letters, and questions to BOSI, BOS, Certus, Tanager - but answers are hard to find. Tanager say it will take a lot of time to get the answers as they don't have the data to hand. They still won't disclose the capital figure on which they are charging interest. This information has been formally requested three times, and even the judge in court said the statements they furnished were not sufficient. They continue to send the same statements. 

Certus told me the arrears are already included in the capital amount on which I am paying interest. If this is the case, and I am already paying interest on arrears (and costs not yet awarded by the courts), and this is being paid every month, are the arrears not in effect already capitalised? How can they seek possession on this basis?

Can they use the same situation for two different arguments?


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## Gerry Canning (8 Jan 2015)

Bridie.

If it is the case that you are in Court with these people ,  you can ring me on 0872437139 I will get you the phone number of solicitor who is dealing with this type of issue.
A phone call to him may clarify case for you. 
I would have thought that they must have exact figures and clarity for Mr Judge.

I have heard of this (stuffing)on arrears but I will leave you to talk to my good contact.


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## Open air (1 Nov 2017)

Is this still relevant brendan?


Brendan Burgess said:


> There was a very important case in the High Court in Northern Ireland where Bank of Scotland was found to be calculating the arrears incorrectly.  It's hard to follow, but you can read about it here:
> 
> Bank of Scotland held to account
> 
> ...


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## Brendan Burgess (2 Nov 2017)

Hi Open air 

Well done for resurrecting this. 

I had heard Ralf Kane referring to this case in the High Court, but I hadn't remembered writing about it. 

I wonder if it has been tested in a court in the Republic? 

Brendan


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## IdesofMarch (2 Nov 2017)

If Kane referred to this case on affidavit, then I believe the Judge must not grant possession in favor of the fund Tanager until this matter has been investigated. The reason why I say this is because when arrears are automatically capitalized, the arrears cease to exist and are automatically added to the outstanding capital amount. As Master Ellison in the NI High Court stated, "you cannot have it both ways" as in, adding (capitalizing) the arrears to the outstanding balance and also relying on the same arrears to bring possession proceedings.


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## Open air (9 Nov 2017)

Beginning to come to light that this could be the case with alot of vulture funds. Start mortgages have began to realise the scale of the problem they have!! Plenty of letters sent out to affected customers today!


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## Open air (18 Dec 2017)

This could be a huge problem for tanager in the new year, serious ramifications for them


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## IdesofMarch (19 Dec 2017)

I have outlined that the Central Bank of Ireland are currently investigating these issues in the other thread Tanager Mortgage Holders. Hopefully all impacted customers will get a letter in the New Year.


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## Open air (9 Jan 2018)

Still no letter!!!!


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## Brendan Burgess (29 Jan 2018)

Michael McGrath raised this with the Central Bank at the Oireachtas Finance Committee Full Transcript 

Deputy Michael McGrath: 

 

 I want to ask about the miscalculation of arrears by Start Mortgages and Tanager. There has been some confirmation in that regard. I am aware of a court case in Northern Ireland and know that both Start Mortgages and Tanager have written to customers about an incorrect calculation of arrears and how interest was treated.  Will Professor Lane bring us up to date on where the Central Bank stands on this issue, what its role is and whether he has any information or figures in respect of it?

Professor Philip Lane: We are aware of this issue and Ms Rowland is best placed to answer.

Ms Derville Rowland: We are aware of this issue and we have been actively involved with it for quite some time. We are in supervisory engagement on the matter. In broad historical terms, it is not a practice that is predominant in this jurisdiction. The methodology used for calculation of arrears is a different approach. This was a more UK-based approach. In a UK court case, the judge, in effect, stated that one cannot have one's cake and eat it by capitalising arrears, on the one hand, and then claiming there are arrears, on the other. There was no double charging, if I call it that, but there was an overstatement of arrears. The judge stated the arrears must extinguished if they are capitalised. It was an approach. What subsequently occurred was that the UK regulator did not introduce a rule banning it, but stated, effectively, that people's repayment amounts might be increased on a monthly basis and if, for example, they were increased by more than £50, it would make it very difficult to pay and so it guided against that. We were aware of this and took the view that it was not a practice we wanted to see here. I am glad to say that it was not a practice widely held in any event in this jurisdiction, but it did arise with entities that had their origins in the UK. We guided very strongly that it was to stop and that is what we expect to see. We are aware of what happened and we are taking regulatory action.

Deputy Michael McGrath: 

 

 Is Ms Rowland stating that it did not impact on the overall amount outstanding on the loan, including the arrears, but that it may have impacted on the calculation of the monthly repayment?

Ms Derville Rowland: The level of indebtedness was correct. The monthly repayment was larger because the arrears were capitalised, but the arrears were overstated. This could be a risk if the two systems did not talk to each other, if the Deputy understands. It was very distressing for people to perceive or believe arrears were presented as being larger than they should have been because the amounts were also being capitalised. It was an information presentational problem. The arrears could be overstated, as well as being dealt with separately through an approach where they would be capitalised, and that could result in a larger monthly repayment request being made.

Deputy Michael McGrath: 

 

 When Ms Rowland says regulatory action is being taken what does she mean? Has she identified how many lenders are involved?

Ms Derville Rowland: I cannot provide specific information but it is a live regulatory matter.

Deputy Michael McGrath: 

 

 What is the Central Bank's view in circumstances where these entities have brought repossession proceedings or are before the courts in respect of customers?

Ms Derville Rowland: My understanding is they have been withdrawn from the court proceedings in order to ensure that they check and catch this issue. We are looking into it.

Chairman: 

 

 I will follow up on the very same point on the action of the Central Bank in regard to Tanager and Start Mortgages. The cases that have ended up in court would have caused a considerable amount of difficulty, trauma and unnecessary actions for the borrower, and left many people quite distressed. In the context of this, how will they be compensated for what has happened to them?

Ms Derville Rowland: I cannot comment on any of those matters. I certainly recognise-----

Chairman: 

 

 No, is it within the remit of the Central Bank to deal with such things to that extent?

Ms Derville Rowland: At the moment, our key focus is on ensuring that this practice ceases and we will take it step by step. At the moment, we are ensuring that this matter does not continue. That is our first focus. As we deal with the problem we will look into the various aspects of it.

Chairman: 

 

 All I am asking is whether the Central Bank has the power to deal with it beyond just that.

Ms Derville Rowland: We would have to look deeper and step by step into the regulatory issues that are arising. We have significant and widespread regulatory powers and we are able to use them where it is appropriate to do so.

Chairman: 

 

 That is fine. That is what I wanted to know. I asked earlier about credit servicing firms. On the list, the total number of transitional credit servicing firms is three and the total number of authorised credit servicing firms is eight. Will the witnesses explain what are transitional credit servicing firms?

Professor Philip Lane: I will ask Ms Mitchell to explain.

Ms Helena Mitchell: When the credit servicing Act came into effect in 2015, a number of firms were providing that service. The stood authorised until such time as they went through the full authorisation process by the Central Bank. They are on our register, but they are subject to the regulatory requirements and then they must go through a full authorisation process. Some decisions are yet to be made on authorising the transitional firms.

Chairman: 

 

 With regard to the eight listed, we have been writing to Pepper Asset Servicing as a firm that gives management services. I do not see it listed here among the eight.

Ms Helena Mitchell: It is authorised as a retail credit firm I believe, and not a credit servicing firm. If another authorisation is held, a firm may be able to provide that service. It is on a register, but it is on the retail credit firm register.

Chairman: 

 

 So it is an authorised agent.

Ms Helena Mitchell: Yes.

Chairman: 

 

 What is the separate list Ms Mitchell is speaking about?

Ms Helena Mitchell: We have different categories of firms that are authorised. What the Chairman has in front of him is the credit servicing register.

Chairman: 

 

 Yes.

Ms Helena Mitchell: Retail credit firm is a different authorisation type and Pepper Asset Servicing is on that register.

Chairman: 

 

 Can we get a list of those also? How many other lists of these firms does the Central Bank have?

Ms Helena Mitchell: There are more than 3,000 retail firms and there are various registers.

Chairman: 

 

 Okay. Regarding the list of credit servicing firms, again we were dealing with Capita Asset Services. I understand it was purchased by Link.

Ms Helena Mitchell: Yes, Link Asset Services.

Chairman: 

 

 In registering these firms is it possible to insist on the name being registered in such a way as that there is a clear distinction? For example, we have Acenden DAC and Acenden Limited. These are two different firms doing the same thing. Is that right?

Ms Helena Mitchell: I am not sure of the details. I can check it for the Chairman and come back to him.

Chairman: 

 

 They are listed as credit servicing firms. Going down through the list, I am making the point the distinction between these firms is not clear enough. I presume they are separate legal entities of their own standing as they are registered here.

Ms Helena Mitchell: I do not have the register in front of me, but I can check and come back to the Chairman.

Chairman: 

 

 That is okay. The other issue on the vulture funds is that the responsibility and the obligation conditions of the original loan travel with the loan wherever it goes.

Professor Philip Lane: No, the originator is responsible for paying out. No matter who holds the loan now, the bill is paid by the original firm, on tracker mortgages.


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## Open air (29 Jan 2018)

As we know they have not dropped proceedings against all borrowers


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## Brendan Burgess (29 Jan 2018)

Senator Rose Conway-Walsh: 

 

 It was said earlier that originators were responsible for tracker mortgages even when they were sold off. Why does that not happen across the board?

Professor Philip Lane: The issue is when the harm was caused. If the harm was caused when the ownership was with a firm which later sold the mortgage on, it is the entity which caused the harm which is held responsible. If the loan was sold on and new harm was generated by the ongoing loan being mishandled, the new owner is responsible. It is about matching the harm to the lender.


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## Open air (29 Jan 2018)

So tanager are responsible?


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## vicvol1 (29 Jan 2018)

Outrageous, but I am relieved a bit that the central bank is aware and acting on this. Thank you so much for posting this Transcript. Goodness knows what the letter which some of us are waiting for will contain... they said that we would receive it by the end of this month. I am hoping that others start getting a letter. the hell they put me through... I don’t know what’s going to happen when I meet them.


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## Browner (30 Jan 2018)

Excellent report thank you. Let’s hope to see the letters soon and then we can all meet up and take action.


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## IdesofMarch (30 Jan 2018)

Deputy Michael McGrath: 

 

 I want to ask about the miscalculation of arrears by Start Mortgages and Tanager. There has been some confirmation in that regard. I am aware of a court case in Northern Ireland and know that both Start Mortgages and Tanager have written to customers about an incorrect calculation of arrears and how interest was treated....

*Deputy Michael McGrath: 

 

 What is the Central Bank's view in circumstances where these entities have brought repossession proceedings or are before the courts in respect of customers?*

*Ms Derville Rowland: My understanding is they have been withdrawn from the court proceedings in order to ensure that they check and catch this issue. We are looking into it.*

Chairman: 

 

 I will follow up on the very same point on the action of the Central Bank in regard to Tanager and Start Mortgages. The cases that have ended up in court would have caused a considerable amount of difficulty, trauma and unnecessary actions for the borrower, and left many people quite distressed. In the context of this, how will they be compensated for what has happened to them?

Ms Derville Rowland: I cannot comment on any of those matters. I certainly recognise-----

Chairman: 

 

 No, is it within the remit of the Central Bank to deal with such things to that extent?

Ms Derville Rowland: At the moment, our key focus is on ensuring that this practice ceases and we will take it step by step. At the moment, we are ensuring that this matter does not continue. That is our first focus. As we deal with the problem we will look into the various aspects of it.

Chairman: 

 

 All I am asking is whether the Central Bank has the power to deal with it beyond just that.

Ms Derville Rowland: We would have to look deeper and step by step into the regulatory issues that are arising. We have significant and widespread regulatory powers and we are able to use them where it is appropriate to do so.

*Now Tanager (and I know you read these posts), I will have to set the record straight with the Miss Rowland of the CBI if you do not withdraw all possession cases like your co offender Start mortgages did. One cannot have one's cake and eat it! Time is ticking!*


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