# If the Ombudsman upholds a Cohort case, the Central Bank expects the bank to apply it to all customers



## Brendan Burgess (24 Oct 2019)

This is my transcript of today's discussion at the Oireachtas Finance Committee. I will wait until I see the formal transcript



from the Opening statement of Derville Rowland of the Central Bank



While our supervisory work is now complete, we continue to monitor the outcomes of any complaints, appeals and court cases and if any new information of a systemic nature comes to light, we will investigate it fully. These channels available to consumers under the Framework will continue to deliver outcomes.

We both welcome any additional uplift in redress and compensation which affected customers may gain through these channels, and remain vigilant in case any outcome has potential wider application to others.

Looking ahead, we have clearly communicated to banks our expectation that if any individual outcomes come to light that have the potential to impact customers more widely, then they must consider and address the broader customer impact. I reiterate that we will continue to monitor the outcomes of any appeals, complaints to the FSPO and court cases, and will utilise our statutory powers as required to seek information from banks in respect of those outcomes.

We will insist on regulatory scrutiny of the circumstances surrounding litigation outcomes to identify any broader systemic customer impact.


*Transcript of  the dialogue  








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Central Bank’s Tracker Mortgage Examination – Final Report (July 2019)



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1.22.30

Michael McGrath*


In relation to the outstanding Cohorts – The largest one being the AIB prevailing rate, in  Ptsb you have the prevailing rate and the discounted tracker issue, with  BoI you have staff  trakcer issue. I am aware of issues with Ulster Bank. With EBS you have a variable base rate issue.

I think it’s fair to say that in broad terms you have concluded your work in examining individual cases and cohorts.

If the Ombudsman finds in favour of customers on these issues and those findings have wider applicatios…if he finds for example at the level of principle an AIB customer should have got a prevailing rate at a margin of 1% as opposed to let’s say 5%



How does that work its way through to the rest of the population in that cohort? Does he have to go through each individual case?  Or will you revisit your approach or will you expect the bank to revisit their approach in dealing with that basket of customers for whom the same principle applies?



*Derville Rowland*– [ goes completely off topic – repeating herself]

In terms of the Ombudsman it’s important to remember that he has a very different statutory mandate to ours which can actually be very beneficial to customers because it’s in that process that they can bring forward their personal information to him  and new information can come to light… and when the Ombudsman makes a decision, the statutory basis for his decision is different to ours. So what that means is it could be of benefit to us if any issues did arise out of cases and we work hard to make sure…

You asked me about the feedback loop we have. I can tell you that it is working well with the Ombudsman . We are in dialogue.

And if we see cases that he is concerned about he will refer them to us. We will look at those and we will require the lender to look at those. We have already told them that where circumstances, there may be new information and if that gives us an extra angle to look at this from a different perspective for customers, we , of course, would do that.

And we would expect the lenders to look at that  that. And where there is information of wider applicability we would expect them to give the benefit of that “read across” to the customers. And that is part of the framework we have in situ right now where we are in dialogue with the Ombudsman about cases . We will look at any issues that raise a concern, we would also expct that the lenders do that work. They do the read across and, of course, if we got new or additional angles on that, of course, we would look at that because we are here to do just one thing, where we can and were we have  a basis for doing so, to deliver for customers



*Michael Mc Grath*

I think that is welcome. And just to be crystal clear.

If the Ombudsman considers an individual customer complaint, let’s say under the umbrella of the AIB prevailing rate, and he finds in favour of that customer and that case is representative of many other cases where the issues at hand are essentially the same. Are you saying that in that scenario , the application of that decision will be expected to be put into effect by the banks

*Derville Rowland*
That would be our expectation. What we would do is go and speak to the Ombudsman about a case. He would send us the decisions. That decision is addressed to the lender and to the individual. So it doesn’t contain all the circumstances that we might want to know about if an issue is raised with us so we would go to the Ombudsman and dig into the issue to get as much information as possible and we would then contact the lender and challenge them

Now, they of course, you will appreciate, make their own decisions about those cases but our expectations have been set very clearly. Perhaps Grainne would like to say something…



*Grainne McEvoy : We have made it very clear in our opening statement that we have been very clear with the lenders that they are required to take the decision of the FSPO and to apply that decision where it has relevance across a wider group of individuals that may be impacted by a similar impact and to rectify accordingly. They are not to look at it on an individual basis and we will challenge the lenders if we find that they are not doing that. 



*


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## Brendan Burgess (24 Oct 2019)

This seems very clear to me. 

If the Ombudsman upholds one of these cases e.g. the AIB Prevailing Rate issue or the ptsb Discounted Tracker issue, the lender will be obliged to look back at all cases and apply that ruling to them. 

Brendan


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## jpbyrne (25 Oct 2019)

Agreed, thanks again Brendan.


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## October2019 (25 Oct 2019)

Agreed, so on that basis do you think there is no point sending in more complaints tot the Ombudsman as this would just clog up the system? I am specifically referring to the AIB prevailing rate cohort here. I assume at this stage someone from each cohort will have made a complaint by now.

Thanks for all your work on this Brendan


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## Brendan Burgess (25 Oct 2019)

Every cohort will have to decide its own strategy, but this is my reasoning. 

Let's take the AIB prevailing rate case as an example. 

There are probably around 10 arguments on which to base a challenge to AIB's behaviour.  Some of these are very weak, and, _in my opinion,_ have a very low chance of success.  I think that there are two or three strong arguments. But someone else might think that my arguments are weak and their arguments are strong. 

I have also seen good arguments, made badly.   Maybe there are examples of weak arguments made very well? 

So if you have a good argument to make, you should make it unless you have seen someone else making that argument well. 

There is also the small risk that AIB might well settle with some of the borrowers to avoid a risk of an unfavourable decision from the Ombudsman. So I would not sit back relying on just one person. 

Having said that, you have 6 years from the behaviour complained about to submit a complaint.  So if you got your redress in March 2018, you have plenty of time. 

If you are a ptsb prevailing rate customer, you got your redress much earlier, so you have less time to complain.

Brendan


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