# Finance Committee meeting Financial Ombudsman tomorrow to discuss trackers.



## skinnylegs (6 Dec 2017)

Hi,
Finance Committee are meeting with the Financial Services Ombudsman tomorrow morning re the tracker examination. Can be viewed on Oireachtas TV.


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## SaySomething (6 Dec 2017)

9.30am in Committee Room 2.

AGENDA: Matters relating to the Tracker Mortgage Examination and the Consumer Protection Framework [_Mr Ger Deering, Financial Services Ombudsman and Ms Isolde Goggin, Chairperson, Competition and Consumer Protection Commission_]

I'll be in work so any updates appreciated!


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## Brendan Burgess (7 Dec 2017)

http://www.oireachtas.ie/parliament/watchlisten/watchlive/committeeroom2/

They are in private session - only people in attendance so far 

Pearse Doherty 
Kieran O'Donnell 
Paul Murphy


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## Brendan Burgess (7 Dec 2017)

Deputy Deasy welcomed to the Committee

Ger Deering & Elaine Cassidy (Deputy FSO)
Isolde Goggin

*Ger Deering opening statement *
Our goal is to redress the balance of power between the provider and the
Dealing with tracker complaints since 2009

1438
540 still open
304 withdrawn

600ish  decided
17%  upheld _(c.100 by my calculation) _
9% partly
74% not upheld

Many of these had their trackers restored

300 have been resolved directly before we made a decision

When I took office, I looked at 437 files to review them.
I engaged with CB to see what information would help them.

November 2015 I gave them my analysis. 

The various triggers which caused people to lose trackers 
The various reasons given by banks
Details of instructions to move rates
Relevant conditions in loan letters 

Some banks said that they would not review cases where the FSO had decided. I wrote to the CEOs and asked them to review all cases, irrespective of whether the FSO had decided or not. They agreed. 

I have reviewed the CB's October report. I am particularly concerned that some banks have not identified people who are impacted. 

If a complainant is not happy with the compensation, they can complain to us
These complaints might bet 
They did not receive a tracker rate. 
They received the wrong margin 
The right margin, but wrong date 
They were not treated fairly 

I will prioritise trackers as soon as the CB review is over 

01 587 7077 is the trackers  team dedicated number  tracker@fsob.ie 

The new time limits means that some complaints which were rejected as out of scope, but now they may well be in scope. 

I can look beyond the contractual terms to look at fair outcomes. I will not be found wanting in this.


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## Brendan Burgess (7 Dec 2017)

Isolde Goggin  -  Fergal O'Leary a member of the Commission

It is the CCPC's view that the way the banks have treated their customers is unacceptable

The contracts must be honoured.

We enforce competition and consumer protection legislation

we get 40,000 contacts which enable us to identify systemic issues.

Event ticketing, motor garages, residential care contracts, we have stopped thousands of unsafe practices.

Our primary role in financial services is education and information.

We run campaigns and have online comparison tools which are our most visited pages.

We focus on areas where there are gaps in consumer protection
pcp car finance, mortgage options page ; price signalling in the insurance sector
consumer help line 131,000 calls since 2014,   153 related to tracker scope

(14 minutes in ...)
Turning to the tracker mortgage issues
We have been closely following it...
We have no information to conduct a criminal investigation but we welcome any information

Customers have been let down
This form of conduct cannot be tolerated
What is most worrying is the lack of a culture of compliance.

There must be strong legislation
There must be vigorous enforcement
There must be informed consumers

(As expected, they have done nothing on the tracker issue and they know nothing about it either - same as with high Irish mortgage rates )


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## SaySomething (7 Dec 2017)

*Pearse Doherty*
Given what we now know, given that 11 financial instutitutions...took or denied their customers the right rate. We know it is now in the region of 30,000 customers impacted, and value in the region of €1Billion. Is there no wee suspicion within the CPCC that they have done exactly the same thing (as the motor insurance industry)?

*Isolde Goggin* points out the differences between criminal price fixing and civil price fixing.

Looking at the behaviour of the bank. It's undoubtedly the case that they all started to remove tracker mortgages at the same time. But it's also the case that they were losing their shirts. So looking at it on an individual basis it was absolutely in each banks interests to get people off tracker mortgages.

And unfortunately it seems that gave rise to unscrupulous behaviour. We would need something more than the fact that it was in their own economic interests at that point.

*PD*
I would argue that every cartel acts in their own economic interests and I do not believe that your points add up. 

_(child home sick so I'm at home watching)_


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## Brendan Burgess (7 Dec 2017)

Pearse Doherty  (only Kieran O'Donnell and Paul Murphy present at this stage)

Asking about motor insurance investigation.

Give what we now know, 11 lenders in the mortgage market, all denied trackers or applied the wrong rates. 30,000 inviduals. €1 billion euro.  

Is there no wee suspicion in the CCPC that there might be a bit of uncompetitive practices?

Goggin: Criminal vs Civil
We don't have civil fines in Ireland.
Cartel activity is so serious, that we want to go the criminal court. But we have to be so careful about evidence. We have seen what happens when public bodies cut corners in this area.   We would need a  search warrant from a judge.  We can't go fishing.

The banks were losing their shirts. It was in their interest to get the customers off the tracker mortgages.  They had good reasons for doing this. We would need more than this for 

Doherty: Every cartel acts in their own interest.


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## SaySomething (7 Dec 2017)

PD says to Ombudsman that says 'he would bet his house on it' that the FSO made errors in their 74% of historical rejected tracker mortgage complaints. They made wrong decisions over and over again and it gave a safety blanket to the banks. The FSO should review them and find out if they were rejected inappropriately and see if there are learnings from this. They need to apologise to those customers for failing them.

_*Personal Comment:* While I didn't make a tracker complaint in 2013 but I did make a complaint in relation to MARP. The FSO has deemed the banks omission of our contract (a tracker mortgage contract) in the discovery phase as not essential to our complaint and would not have made a difference. _


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## Brendan Burgess (7 Dec 2017)

*Doherty to Ombudsman 
*
I am conscious that you were not there when these decisions were made by the office.

How many of the rejected complaints are now in scope?

Deering: A small number so far, in one particular bank have been impacted. (They are almost all in scope)

Doherty: Of the 509 that you rejected, how many were impacted

Deering: Only 3 - we don't know how many were not impacted.

Some were from people who never had trackers.  e.g. They would like to have been offered a tracker, but weren't.

Pearse: Why do you not know?

Deering: We are in constant contact with the complainants and the lenders.

Pearse.Let's say that AiB has 100 rejected complaints. Have you written to AIB and asked them if they had been rejected.

Deering: No. We only get information when the complainant comes back to us.  We have not got information on live complaints yet.

Pearse: You  rejected 74% of complaints. Although some should have been rejected,  I would bet my house that you made some serious errors.  The lender tortured people based on the fact that they had an FSO decision in their favour.

You have a responsibility to review all these to see if they were rejected.

The FSO needs to apologise to these customers individually.

I commend the FSO for making sure that the banks have included all cases.

Deering: I accept that if the banks give back a tracker where we rejected, then we were in the wrong and will apologise.

The 6 year rule may have affected the decision.

Recently , I received additional information on a complaint. I contacted the bank and wasn't happy with the response. So I went to the High Court to get the decision quashed and it was.

I have met the people who failed with us but got a success at the review.

*Pearse :  Compensation levels 
*
When you upheld complaints, did you award lower or higher compo than the CB review

Deering: Our compo would have been lower, but the decision would have been quicker.

Pearse: Have you had any cases of appeals of compensation.
Deering: Not yet.

Pearse: BoI's policy for non pdh  which required restructuring - were charged an extra 1%. What is your view on this? 

Deering: I will answer in general, not relating to any bank.  You can't charge more under the CPC. (No Ger - the CCMA doesn't apply to non pdh's except in rare circumstances.)


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## Brendan Burgess (7 Dec 2017)

Don't know who is asking questions now.

Maybe John Deasy FG? 

Question about 6 year time limit


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## Brendan Burgess (7 Dec 2017)

Kieran O'Donnell : How many open cases? 

Deering: 540  - only 80 have been deemed impacted so far.

O'Donnell: It's unusual that the CB and FSO is doing the same work. 

If only 80 of540 cases are impacted, does it mean that the trawl by the CB is not comprehensive enough.

Deering: Not everyone who complains is entitled to a tracker back.  I can't tell you how likely these 540 cases are to succeed. 

O'Donnell: Why did you not just continue with processing the complaint? 

Deering: Because they will get the right information through the CB  process.


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## Brendan Burgess (7 Dec 2017)

O'Donnell: Miss Goggin, do you belive that hte mortgage is dysfuncitional

What do you define as a cartel?

Goggin: Yes, it's dysfunctional
Coordinated conduct to fix prices or share markets or rig bids.

ODonnell: The fact that rates are double the euro rates.

Goggin.No - we are seeing different prices

ODonnell: Why do you think that the mortgage rate is double the eu rate

Goggin: Risk and lack of competition

A lot of non performing loans - we need to price the mortgages higher

O'Donnell We had German banks saying that they could provide 10 years rates at just over 1%

Goggin: Why haven't they done it? It would be great if they did.

There is more competition now.  But you can save by switching.

O'Donnell ; Surely  you have a role in providing reassurance that  there is no cartel. Why don't you investigate it.

The banks did not cooperate - they all did what they could [to get people off trackers]

O'Donnell: You are categorical that there is no cartel

Goggin:  We have no evidence that there is a cartel.  A criminal investigation needs evidence e.g. a witness who attended a meeting.


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## Brendan Burgess (7 Dec 2017)

Senator Burke : When did you start to investigate whether there was a cartel or not.

Goggin: No we didn't have an investigation  - we can't look without evidence e.g. an unexplained price rise across the board without an explanation.

Burke: You didn't ask any of the banks when did they start changing their rates

You carried out no investigation - criminal or not.

Goggin: We knew perfectly well that there were problems in the mortgage market.  But we did not do a cartel investigation.

Burke: But you are investigating the insurance industry?

Goggin: It's a wider investigation. Hope it will be completed next year, but it might take two years.

Burke: Will you be doing an interim report

Goggin: Since we announced the investigation, prices have leveled off or fallen.

Fergal O'Leary: The European Commission is also investigating the insurance market.

We have a cooperation agreement with the Central Bank. So we don't investigate the trackers as there are already two players on the pitch.


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## SaySomething (7 Dec 2017)

Joan Burton speaking - wants to discuss waste management sector with the CCPC. During a tracker mortgage hearing.
That's her phone interfering with the sound.


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## Brendan Burgess (7 Dec 2017)

Joan Burton

Household waste collection. Will you look at the salaries and wages of those working in the industry.

Joan - the clue is in the title of the meeting






It's very dangerous having 3 waste lorries on the one road blocking ambulances.

Will that cover prices and packages.

[Where is the Chairman - this waste of time should be stopped] 

She is now onto brown bins and the incinerator.


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## SaySomething (7 Dec 2017)

And now we're onto car finance & PCP market. *sigh*


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## Brendan Burgess (7 Dec 2017)

At last,she asks about PCP car finance

How many contracts have been issued and how much?

CPC:  About €800m outstanding. A very big market

Burton: CPC is very attractive to young male drivers especially when credit from banks is hard to access

When they later apply for a mortgage, they will be stopped by the fact that they have a €25k loan outstanding on a car.


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## skinnylegs (7 Dec 2017)

Did she go in the wrong door


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## Brendan Burgess (7 Dec 2017)

SaySomething said:


> And now we're onto car finance & PCP market. *sigh*



To be fair , it's not just about trackers. It's the Consumer Protection Framework.


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## Brendan Burgess (7 Dec 2017)

Chairman : Can I remind you this meeting is about tracker mortgages


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## SaySomething (7 Dec 2017)

Finally the Chairperson steps in! Should have stopped her sooner.


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## Brendan Burgess (7 Dec 2017)

Burton:  If you ask young people about car insurance, they will think that they are being robbed

If people are renting, and move, the insurance cars charge a very high fee for switching address - they used to be €20. Now they are €50 or more. 

It's a hidden cost of renting.


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## Brendan Burgess (7 Dec 2017)

Fergal: We are focussed on the price signalling investigation.


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## Brendan Burgess (7 Dec 2017)

Burton: In relation to trackers, do you meet the banks on a collective basis?  The extraordinary alignment of much of the practices.

Fergal: We encourage the banks not to meet collectively. We don't meet them collectively either.

The CB is the sectoral regulator. If they find evidence of collusion, they must notify us. The CB has been looking at trackers for 7 years. We met with the CB earlier this year to discuss the tracker examination and at that stage they had no information of criminal behaviour. If we get any actionable evidence, we will take it forward.

Burton: In terms of arrears, are the codes strong enough? Do you have any powers in this area? A lot is outsourced. Having made an agreement, themoment the year of the agreement is up, they are back again facing repossession.


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## Brendan Burgess (7 Dec 2017)

[You would really miss Michael McGrath.  The Labour Party has really gone down hill

Seán Sherlock wasn't great, but Joan Burton takes the biscuit.

Senator Burke beside her is on his mobile phone which is probably what is causing all the interference. ]


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## Brendan Burgess (7 Dec 2017)

John McGuinness

asks Goggin: What are you going to do about it:

Goggin: Information and education
We are concerned where products are deliberately complex

We recommended looking at cash discounts and cash backs in our mortgage paper.

There are two agencies looking at enforcement, but the CB looks at that.

McGuinness
Since 2009, the banks have been exposed for theft.  In one bank alone, 20 homes have been lost.
You say that's because they were losing their shirt on tracker mortgages.

I am asking you who is supposed to be protecting consumers, who lost not just their shirt, but their homes, what do you say to them?

I don't see you doing anything.

Goggin:  Big delay. The best way to achieve redress is to leave it to the Central Bank investigation. We have 90 people. The Central Bank has 20 times that number.

McGuinness: It appears to me that you are doing nothing.  We are in this space today because of pressure from other people [not your work].

You are waiting for a whistle blower. Look at what happened to Maurice McCabe.Do you think anyone will come forward.  Look at the 2,000 BoI staff who were refused their trackers because they were financially literate.

Goggin: It's not within our power to get redress.

McGuinness: You are consumer protection, aren't you? What are you doing? I keep on asking you... Only today, you used the committee to ask whistleblowers to come forward. Why are you not to the fore in relation to this?

Goggin: We can't carry out an investigation, without evidence. There must be some employees who are sufficiently annoyed to come forward if there was misbehaviour?

McGuinness: How else do you collect your information? Do you not actively go out looking for it.

Goggin: The CB has an obligation to bring any such information to our attention.

McGuinness: Are you afraid of the banks.

Goggin: Hearsay evidence is not enough to base an investigation.  We are not afraid of banks.  We can't do any more than we are already doing.  We do need to review it after the CB review is over. 

McGuinness: It wasn't someone at the front desk who took off the trackers, who charged the very high rates. It wasn't someone at the front desk of ptsb, who decided their strategy.

If all the banks did the same thing at the same time , it stinks of a cartel. 

Have you ever spoken to Padraic Kissane. 

Goggin: No, but I can't see that he would have any evidence. 

McGuinness: How do you know, if you haven't spoken to him? 

[This is the first proper exposure of the CPCC's total lack of action on the tracker issue] 

McGuinness: Have you spoken to Mr Kissanne, mr Deering.  [ Brilliant move]

Deering: Yes,I have met him. He is very experienced and well informed.


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## Miakk (7 Dec 2017)

Go John McGuinness!


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## Threadser (7 Dec 2017)

Well done John McGuinness for such a robust line of questioning!


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## Mauritius (7 Dec 2017)

An 'apology' from the FSO for wrong decisions on tracker accounts is not anywhere near good enough. 
The Financial Services Ombudsman should make a one off compensation payment of €5,000 to each person they failed to uphold who should have been upheld. The FSO failed these people abysmally and failed at its job. It directly contributed to ongoing misery and financial hardship. It's far too easy indeed to write an "I'm sorry" letter years later and not face any consequences. 
As McGuinness put it:

McGuinness: It appears to me that you are doing nothing. We are in this space today because of pressure from other people [not your work].


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## Brendan Burgess (7 Dec 2017)

Mauritius said:


> McGuinness: It appears to me that you are doing nothing. We are in this space today because of pressure from other people [not your work].



Are you not confusing what he said to the Ombudsman to what he said to the CPCC? The CPCC did nothing.  The FSO has no role other than to adjudicate fairly on complaints. 

Brendan


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## SaySomething (7 Dec 2017)

Yes, Pearse Doherty was the one who called on the FSO to make an apology to customers within 74% of tracker complaints not upheld who subsequently receive their tracker back.


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## Mauritius (7 Dec 2017)

Correct.  But the FSO didn't make the correct decisions in many cases and I find it very hard to see how that can be justified by an apology.  
I should have quoted this part:

Pearse: You rejected 74% of complaints. Although some should have been rejected, I would bet my house that you made some serious errors. The lender tortured people based on the fact that they had an FSO decision in their favour.

You have a responsibility to review all these to see if they were rejected.

The FSO needs to apologise to these customers individually.

I commend the FSO for making sure that the banks have included all cases.

Deering: I accept that if the banks give back a tracker where we rejected, then we were in the wrong and will apologise.


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## SaySomething (7 Dec 2017)

I think it's very interesting that Ger Deering mentioned that the banks withheld information from them on occasion (but says it doesn't happen that often). He referred to the well known High Court case which was withdrawn based upon a phone call recording which was not originally disclosed to the FSO during the complaint. 

@notabene was able to get a copy of emails after her FSO decision where the bank engaged in underhand practises when dealing with the FSO.

I have an issue where a copy of my mortgage contract was withheld from the FSO.

That's 3 cases where the banks withheld information from the FSO that I can verify for certain. I'm aware of many other cases where I don't know the customer but have heard @PadKiss mention them. 

The FSO makes/made his decisions based upon the best information available to him at the time. The culture of the banks seems to be to give the FSO an edited version of files designed to engineer the outcome in their favour.


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## skinnylegs (7 Dec 2017)

@SaySomething I think that Mr Deering, as well as being fair, will prove to be a very strong advocate on behalf of the consumer when it comes down to it. 
The consumer protection crowd came out very poorly of this morning sessions.Their powers, or the will to use them, seem very inadequate.


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## Miakk (7 Dec 2017)

I think it’s fair to say that mr Deering was not at the helm when most of these (apparently) erroneous FSO decisions were made & the banks seemed to play the FSO ... but what is the consequence (if any) for the most recent previous FSO?

I believe that prior to the FSO he also worked for the Competition Authority, as it was called at the time. He is now in another €€€ position as CEO of the Irish medical council.

Can he be called before the committee on his handling of this issue and put through the same vigor as today’s attendees?

I think he is getting away scot free , just like the banks,  and it adds insult to injury that he has not been called to account on how he ran his office at such a critical time


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## Andy836 (7 Dec 2017)

Brendan Burgess said:


> O'Donnell:........
> 
> Goggin: Risk and lack of competition
> A lot of non performing loans - we need to price the mortgages higher
> ...



How this guy puts on his shoes correctly is a mystery to me. Is there anyone on the Cmmttee that is on top of their brief and isn't looking for a soundbite?

To clarify. They most certainly did not have German banks in saying the could provide 10 year rates at just 1%. *The representative from Germany made it crystal clear, they would not be entering the irish market and would not be extending loans to Irish borrowers. *It was for the Irish to sort it out themselves and the Germans would help them set up a central shared servicing/processing unit. Not a cent of German capital was offered.


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## todo (7 Dec 2017)

Threadser said:


> Well done John McGuinness for such a robust line of questioning!



Agreed well done to John McGuinness, the CPCC should be called again in 30 days time to give update on what they have achieved in the 30 days.


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## Mauritius (8 Dec 2017)

'I believe that prior to the FSO he also worked for the Competition Authority, as it was called at the time. He is now in another €€€ position as CEO of the Irish medical council.
Can he be called before the committee on his handling of this issue and put through the same vigor as today’s attendees?'

Absolutely right @Miakk  - Bill Prasifka should be called in to answer for his failings that blighted so many lives.  
Here's where to find him:
https://www.medicalcouncil.ie/News-...ems/Medical-Council-s-New-CEO-Announced-.html


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## TrackerThieves (8 Dec 2017)

I've watched all the tracker finance committee meetings/dail discussions  to date, haven't seen this one yet. I've noticed Joan Burton involved in the odd meeting and really cant remember anything worthwhile she had added. From what i can see she added here she really is useless and no idea why she is involved


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## IdesofMarch (9 Dec 2017)

Isolde Goggins wants evidence of a bank cartel to fall into her lap like manna from heaven. Is the head of our Competition and CONSUMER PROTECTION Commission that naive. Get out there and do your job, investigate!


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