# Why is it taking all the banks so long?



## Brendan Burgess (6 Oct 2017)

In theory, it should be simple enough.

1) Identify whether the customer lost their tracker unfairly or not.
2) Then put you back on the right rate
3) Then work out the refund of the overcharge
4) Then negotiate compensation.

*1) Identify whether the customer lost their tracker unfairly or not.*

This will be clear in some cases and arguable in others.
I am guessing from Ulster Bank's evidence that they deemed that people who switched lenders were not affected, but that the Central Bank argued that they were affected. This is why 1,000 switchers were discovered since last December. 

Having completed stage 1, they could then write to people saying:
You were affected or you were not affected. 
Then those not affected could start the appeals process if they wished. 

*2) The right rate will be clear in almost all cases. *
There will be some disputes. And in those cases, the people could begin their appeals. 

Stage 2) should not take more than weeks for 90% of customers 



*So where are we after Stage 1) and Stage 2) have been completed?
*
Almost everyone has been told that they are affected and they have been put back on the right rate. They are delighted. They will wait for the refund and compensation, but this could all have been done within a few months of the commencement of the review.

*3) Then work out the refund of the overcharge*
This is more complicated than people think.  I imagine that Ulster has a particular problem given how bad their systems are. It's also possible that they don't have the expertise to work out the refunds. 

If people know that a refund is coming, they will be happier than people who don't even know two years later whether the lender considers them impacted. 

*4) Design and pay the compensation *
This is a long stage.  Some cases could take years to appeal and sort out. The Central Bank would have to agree the compensation level offered. That could take a lot of negotiation. 


*So why are the banks taking so long? 
*
I have no doubt that they would like to have sorted this out years ago and not have it hanging over them. 

But the Central Bank's insistence on doing it all simultaneously and having two separate independent reviewers has made it a much longer process than necessary. 

In particular, the banks should have been told to write to everyone whom they deemed "not impacted" within months of the review starting. 

There are people hanging around expecting to get a refund who will be devastated when they find that they are not impacted.


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## SaySomething (6 Oct 2017)

In Autumn 2015, Ulster Bank issued a statement that they had examined their accounts. They went on to say that all customers entitled to a return to the tracker had done so.


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## Brendan Burgess (6 Oct 2017)

Hi SS 

I think that the CB review began in December 2015? 

Up to then the banks had reviewed cases on a contractual basis. 

The CB extended the scope beyond the purely contractual to cover issues such as full disclosure and what a customer might reasonably expect. 

Brendan


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## SaySomething (6 Oct 2017)

Had to go and check my source. It as a statement to Primetime. Bob Quinn covered it on his blog: [broken link removed]


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## Brendan Burgess (6 Oct 2017)

Hi SS

“*That all their customers who have a contractual right to revert to a tracker rate have reverted unless they’ve opted for another rate at the end of a fixed rate period*”.

That is interesting. It should have said 

"That all their customers who have a contractual right,_ in our opinion,_ to revert to a tracker rate have reverted unless they’ve opted for another rate at the end of a fixed rate period. _However, we have not yet identified the customers who would meet the broader guidelines of the Central Bank, who would not have a contractual right,but who would have a case based on the lack of disclosure and lack of transparency." 

Brendan _


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## RedOnion (6 Oct 2017)

Brendan Burgess said:


> In theory, it should be simple enough.
> 
> 1) Identify whether the customer lost their tracker unfairly or not.
> 2) Then put you back on the right rate
> ...



Part 1 is far more complex than anyone planned.
Here's what might have happened hypothetically: I am not involved in tracker review in any bank, but have been in other overcharging reviews.

Initially they looked at their current mortgages, and filtered to those that aren't on trackers. 
Then they looked to see if any of those were ever on a tracker, and should have been returned to it.
This is the review that had been planned and resourced. All simple stuff.

Then realised they should have looked at not just those that were previously on a tracker, but all those that were ever entitled to it, e.g. started on a fixed rate.
But the systems didn't have the required data, so it involved a large paper trawl to identify. Some documents can't even be found.

Then after arguments with CBI over contract law and statute of limitations, finally agreed it shouldn't just be their current mortgages but every Mortgage including those redeemed. So another big exercise that hadn't been planned or resourced.

In the process they uncover other issues not related to the initial search: rate changes on the wrong day, customers still on trackers but at the wrong margin. Now they have to broaden their scope and look out for that everywhere because it was in CBI terms, and do some rework on contracts they'd already reviewed.

So now the project is 10 times what they'd planned, but progress is being made.

Now the independent review starts. They have lots of clever ideas of things they've seen in other banks, and start a few more mini reviews to see if you're impacted. Then they need to sample the cohorts the bank had said weren't impacted.

Finally they're getting somewhere. But they can't write to customers yet because they're not 100% finished.

Then they get to the calculations...
Which for 80% of cases is straight forward, but requires a new system (database) to be built and tested because the mainframe can't do the calculation.
The other 20% prove to be a nightmare, and many require manual review; where the loan was redeemed, warehoused, or possibly the customer has an equity release also so effectively 2 Mortgages need to be recalculated together, mortgages sold, and repossession cases. But you have to finish everything at the same time.


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## SaySomething (6 Oct 2017)

RedOnion said:


> Finally they're getting somewhere. But they can't write to customers yet because they're not 100% finished.
> 
> Then they get to the calculations...
> Which for 80% of cases is straight forward, but requires a new system (database) to be built and tested because the mainframe can't do the calculation.
> The other 20% prove to be a nightmare, and many require manual review; where the loan was redeemed, warehoused, or possibly the customer has an equity release also so effectively 2 Mortgages need to be recalculated together, mortgages sold, and repossession cases. But you have to finish everything at the same time.



But you see that's where the issue is. For the 80% of the straightforward cases there is no reason why they can't commence redress now. In fact, under the guidelines the banks are encouraged to progress to Phase 3/4 with identified customers while Phase 2 is still ongoing for others.

It's where the banks insist on remediating all accounts at once that you get the bottleneck.

In my personal opinion, redress is the priority here along with the independent advice payment. Compensation can follow. If the monies were refunded as a priority there would be less outrage.


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## moneymakeover (6 Oct 2017)

What is the cost of employing 200 individuals for 3 years?


Probably cheaper to put anyone with a shout back on tracker

Unless the entire bank response is a scam and a ruse

They know who.

They know how much.

But it's not in them to give anything away.

It has to dragged out of them.

Kicking and screaming.


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## Brendan Burgess (6 Oct 2017)

SaySomething said:


> For the 80% of the straightforward cases there is no reason why they can't commence redress now.



That is a very good point. 

The CB should have told them to address the 80% easy cases first and sort them out.  The banks should write to the 20% cases and say we are reviewing your case and will be in touch. 

It's crazy that UB has only redressed 40 customers out of 3,500. There must have been a couple of thousand easy cases.

Brendan


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## justo (6 Oct 2017)

Brean


Brendan Burgess said:


> That is a very good point.
> 
> The CB should have told them to address the 80% easy cases first and sort them out.  The banks should write to the 20% cases and say we are reviewing your case and will be in touch.
> 
> It's crazy that UB has only redressed 40 customers out of 3,500. There must have been a couple of thousand easy cases.



I've asked the question earlier in posts and I still regard it pertinent : are the < 40 cases those represented by P Kissane? I respect the work he's done greatly but we must have understand why the < 40 were prioritsed.


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## diver (7 Oct 2017)

justo said:


> I have great respect for the work of P Kissane but perhaps the< 40 cases that were redressed were the ones he was representing? I think it's another ULB smoke screen. They have not embarked on redress but simply responded to those with representation. Do you disagree?



Quite possibly the <40 cases were due to Padraic, I was one of those 40 cases.
It's also highly likely that no cases have been redressed since the CB review i.e. these 40 cases are likely to have been redressed 2-3 years ago when threatened with the FSO. My redress was 3 years ago.


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## Gen360 (7 Oct 2017)

@diver Are you saying that the number of people redressed since the start of the cb review could actually be zero? And that the <40 number given by ub could be from previous fso investigations?


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## justo (7 Oct 2017)

Gen360 said:


> @diver Are you saying that the number of people redressed since the start of the cb review could actually be zero? And that the <40 number given by ub could be from previous fso investigations?



I think it is a question that the Finance Committee must put to Mallon and Co. I was jumping up and down watching the screen during the Committee meeting. 

I wanted them to ask 'When was the last person given their money back?' 'How many people will get their money back next week?', 'Why will they be selected over others'? 'When you ramp up, what is the target per month?' etc.


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## MrBanks (7 Oct 2017)

I think one of two things will speed them up now
1: Reputational damage - they haven't appeared to give a monkeys to date but as more cases break into media etc they might wish to stop the tsunami.
2: The CB actually start to do their job and introduce penalties.


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## Gen360 (7 Oct 2017)

If ub are using <40 cases from before the start of the cb review. Then they are are seriously behind. This was not picked up by the committee and no clarification was sought. What are they hiding? There is a real possibility that they just do not know how to sort this mess out. In the past they have had some great IT problems, they could be missing the documentation needed. I guess we’ll never know.


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## Palerider (7 Oct 2017)

Ulster Bank are a long way past caring about reputational damage.

The exercise simply should not take that long, the delays can only be within the process they are operating to and the staff within that process, they should have key performance indicators and milestones set against a planned timeframe to get this done.

Of course they should but do they vigorously challenge delays as it does not seem that way to me.


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## MrBanks (7 Oct 2017)

Palerider said:


> Ulster Bank are a long way past caring about reputational damage.
> 
> The exercise simply should not take that long, the delays can only be within the process they are operating to and the staff within that process, they should have key performance indicators and milestones set against a planned timeframe to get this done.
> 
> Of course they should but do they vigorously challenge delays as it does not seem that way to me.



I do think reputation will be a consideration for Ulster bank.  They have been shafting us a for years. They have been able to do so without any real consequences because typically as Irish we don't like to speak about our financial difficulties in public. What is happening now, is many people who were silently and patiently waiting are no longer prepared to.
I am one of these. 41yrs of age, paid my taxes worked every day since college. I am ready to walk the streets and I will fight Ulster bank until they paid me back every single cent. More than that, I will fight for all those who can't or who simply can't take anymore from Ulster Bank.


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## diver (7 Oct 2017)

Gen360 said:


> @diver Are you saying that the number of people redressed since the start of the cb review could actually be zero? And that the <40 number given by ub could be from previous fso investigations?



It's certainly not beyond the realms of possibility. This tracker scandal has been going on for years, long before the CB stepped in and ordered a review. A number of UB customers had their trackers and overpayments returned, including myself, quite a while before the CB stepped in. The question of how many hasn't been asked of Ulster Bank yet.


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