# Richard Curran: Time for plain talking about who is to blame for tracker scandal



## moneymakeover (10 Apr 2017)

Article by Richard Curran

About who will take responsibility for the entire tracker mess

He draws a nice parallel between the systemic behaviour of the banks during the boom lending 

And the behaviour of the same banks when they refused to return customers to tracker subsequently.

The common thread of course is the regulator

http://m.independent.ie/business/ri...is-to-blame-for-tracker-scandal-35605631.html

Also mentioned is Richie Boucher


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## moneymakeover (11 Apr 2017)

Similar story by Fintan O'Toole in today's Irish Times.

https://www.irishtimes.com/opinion/...s-until-we-change-our-idea-of-crime-1.3043902

Might be subscription only.

He is saying where are the Gardai?

The level of fraud (15,000) is three times the number of fraud cases normally reported in an entire year (5,000)


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## Bronte (11 Apr 2017)

moneymakeover said:


> Similar story by Fintan O'Toole in today's Irish Times.
> 
> https://www.irishtimes.com/opinion/...s-until-we-change-our-idea-of-crime-1.3043902



We don't do white collar crime in Ireland. 

_Last week the governor of the __Central Bank__, __Philip Lane__, was back before the Oireachtas Committee on Finance. He spoke, among other subjects, about the massive operation by virtually the entire Irish banking system to deceive customers into giving up tracker mortgages and accepting higher interest rates. 

And there was no reason to believe from anything we heard from him or his colleagues that anyone will face criminal prosecution for this enormous scam._


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## Brendan Burgess (11 Apr 2017)

moneymakeover said:


> The level of fraud (15,000) is three times the number of fraud cases normally reported in an entire year (5,000)



Fraud is a criminal offence. 

I have not seen or heard of any evidence of fraud relating to trackers. There has been a lot of bad treatment of customers, but nothing I have seen yet, comes anywhere close to fraud. 

And be careful what you wish for. If the Central Bank suspects fraud, they would have to refer it to the Gardai.  And the whole process would stop for years while they investigate it. 

Brendan


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## Bronte (11 Apr 2017)

Brendan Burgess said:


> Fraud is a criminal offence.
> 
> I have not seen or heard of any evidence of fraud relating to trackers. There has been a lot of bad treatment of customers, but nothing I have seen yet, comes anywhere close to fraud.
> 
> ...



Well Fintan O'Toole, who of course is not a lawyer, thinks otherwise:

_The Criminal Law (Theft and Fraud Offences) Act 2001 says: “A person who dishonestly, with the intention of making a gain for himself or herself or another, or of causing loss to another by any deception, induces another to do or refrain from doing an act, is guilty of an offence.” 

Is there not a very strong prima facie case that very senior people in the banks deceived other people (their customers) to take an action (changing their mortgages) with the intention of making a gain for others (the bank) and a loss for those customers?
_
You would agree that the banks deliberately stopped people having their trackers?


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## Brendan Burgess (11 Apr 2017)

If I run a boiler room and encourage people to invest in a non-existent company, that is fraud pure and simple.  If I get caught, I will be convicted and sentenced for it. 

We know that the banks interpreted their mortgage contracts differently from some of their customers.  In many of these cases, the FSO who is independent, upheld the banks' interpretations. In some cases they sided with the customer.

That is not fraud. 

So what about the space in between these two positions? 

There seems to be a few legal tests, all of which must be met 

dishonesty

intention to cause a loss 

by deception 

induces another to do or not do something
I have not yet seen these criteria being met. 

There are enforcement investigations going on in ptsb and Ulster Bank and maybe some evidence of fraud will emerge from those investigations. 

BoI wrote to customers on trackers about 2 years ago inviting them to fix.  Was that dishonest? Was it deception?  I am not sure. I am absolutely sure that anyone who fixed as a result of that letter should get their trackers back without any argument.  I just don't know if it meets the very high bar of criminality.

Brendan


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## emeralds (11 Apr 2017)

Brendan Burgess said:


> Fraud is a criminal offence.
> 
> I have not seen or heard of any evidence of fraud relating to trackers. There has been a lot of bad treatment of customers, but nothing I have seen yet, comes anywhere close to fraud.
> 
> ...



I am almost 100% sure I heard last week that the Central Bank have been in touch with the Gardai about this.
Edited to add that yes I did.
https://www.rte.ie/news/business/2017/0404/865065-philip-lane-on-mortgages/


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## Onceagain (11 Apr 2017)

It's easy for people who have not been impacted, ignored, and walked on for 8 years, not to understand the huge impact that this is and continues to have on  people. If the shoe was on the other foot, I wonder would they so understanding of the banks.


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## T McGibney (11 Apr 2017)

Bronte said:


> Well Fintan O'Toole, who of course is not a lawyer, thinks otherwise:
> 
> _The Criminal Law (Theft and Fraud Offences) Act 2001 says: “A person who dishonestly, with the intention of making a gain for himself or herself or another, or of causing loss to another by any deception, induces another to do or refrain from doing an act, is guilty of an offence.”
> 
> ...



Fintan is indeed not a lawyer, but the master of the bogus conflation and the self-serving half-truth.

He remains strangely silent about _the prime facie case that very senior people_ in The Irish Times spent €50m buying an auctioneers website _to deceive other people _(the site's readership)_ to take an action _(overpaying for houses)_ with the intention of making a gain for others _(the Irish Times and the site's auctioneering clientele)_ and a loss for those customers._


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## moneymakeover (11 Apr 2017)

Trying to stay on topic

Governor Lane also said the banks were interpreting contacts to suit their interests

That is wrong of the banks obviously and potentially fraud.

Where was the central bank for 8 years while this was happening? 

Where was the ombudsman?

Easy for Governor Lane to produce sound bites for politicians but when will it all be corrected?


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## Brendan Burgess (11 Apr 2017)

moneymakeover said:


> Governor Lane also said the banks were interpreting contacts to suit their interests
> 
> That is wrong of the banks obviously and potentially fraud.



Most people and companies do interpret contracts to suit their own interests. That is not fraud.   




> Where was the central bank for 8 years while this was happening?


They did intervene occasionally, but only when it was very clear cut.

Bank of Ireland/ICS puts 2,096 customers back on trackers after their fixed rate expired

Weren't BoI very lucky that the Central Bank copped this on time and got them to fix it? Others waited until 2015 and people have had big claims for compensation as a result.



> Where was the ombudsman?


The Ombudsman was fulfilling its duty and its only duty. Its job is to resolve complaints. When it got complaints about trackers, it resolved them, sometimes in favour of the borrower, sometimes in favour of the banks. I believe that they also referred systemic issues to the Central Bank which did occasionally take action. 


Brendan


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## Jim2007 (11 Apr 2017)

Bronte said:


> You would agree that the banks deliberately stopped people having their trackers?



If we followed his logic then we'd end up charging everyone that ever made an ad.

O'Tool is just a blogger at this stage, who's objective is get attention so advertising flows in.


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## nonie (11 Apr 2017)

BoI didn't "cop on" to my mortgage on back of CB intervention in 2010 even though we'd been arguing for the Tracker back since 2008.... so that's one account that they were aware of but choose not to correct...


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## moneymakeover (11 Apr 2017)

Same goes for me regarding Bank of Ireland and many others i would guess

Bank of Ireland are not out of the woods yet

And really Brendan.... You really consider yourself a consumer advocate?


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## Brendan Burgess (11 Apr 2017)

nonie said:


> BoI didn't "cop on" to my mortgage on back of CB intervention in 2010 even though we'd been arguing for the Tracker back since 2008.... so that's one account that they were aware of but choose not to correct...



Hi nonie

Your case is very specific and not the same issue as this.


Bank of Ireland/ICS puts 2,096 customers back on trackers after their fixed rate expired

My view at the time was that you had virtually no case. 
http://www.askaboutmoney.com/thread...-appealing-to-high-court.189082/#post-1399782

Having said that, the tracker review is throwing up some strange decisions, so you might get compensation.

Brendan


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## moneymakeover (11 Apr 2017)

Brendan

I don't mean to be harsh but mistakes were made.

Possibly criminal.

Banks can't interpret contracts to their own advantage when they are wrong and even when there is ambiguity.

The main reason they did it was because they stood to gain so much.

They only behave themselves when

The stakes are small
The bailiff is watching


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## Bronte (11 Apr 2017)

T McGibney said:


> He remains strangely silent about _the prime facie case that very senior people_ in The Irish Times spent €50m buying an auctioneers website _to deceive other people _(the site's readership)_ to take an action _(overpaying for houses)_ with the intention of making a gain for others _(the Irish Times and the site's auctioneering clientele)_ and a loss for those customers._



Wow, you should start a thread on that.  Never heard of that before !


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## T McGibney (11 Apr 2017)

Bronte said:


> Wow, you should start a thread on that.  Never heard of that before !


Common knowledge, but you won't hear or read much about it in Irish media.  https://www.rte.ie/news/business/2006/0728/78794-myhome/


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## nonie (11 Apr 2017)

@Brendan Burgess . On a timeline Brendan this was the first error on our account. If our Tracker had been returned to us at any point when we argued for it from 2008 on then we could have made informed financial decisions. The FSO ruling was that BoI "did act wrongfully, and in breach of duty, when it failed to offer the Complainants the option of switching mortgage account XXX back to the original tracker rate". In addition BoI then withdrew banking services from us post the Ruling. If we are not compensated for the financial and mental detriment Bank of Ireland has caused then this Review has failed.


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## Brendan Burgess (11 Apr 2017)

moneymakeover said:


> mistakes were made.
> 
> Possibly criminal.



Mistakes are not generally criminal. I think that intent is required, unless it's criminal negligence. 

 It possibly amounts to the high bar required for fraud. But it's more likely that it doesn't.

Brendan


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## T McGibney (11 Apr 2017)

Brendan Burgess said:


> Mistakes are not generally criminal. I think that intent is required, unless it's criminal negligence.
> 
> It possibly amounts to the high bar required for fraud. But it's more likely that it doesn't.
> 
> Brendan



Sharp practice isn't generally criminal either. The bar for fraud is indeed set at a very high level.


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## Bronte (11 Apr 2017)

Brendan Burgess said:


> Mistakes are not generally criminal. I think that intent is required, unless it's criminal negligence.
> 
> It possibly amounts to the high bar required for fraud. But it's more likely that it doesn't.



Do you not think that the decision to remove trackers was taken at a high level, that it was deliberate and there was some intention there to do so.  Obviously the intention was to make more money for the banks on the loss making trackers, but if they sat at a board meeting and decided to intentionally deprive customers of tehir contractual rights knowingly than the intention to defraud is surely there.  It would be even more so if they had legal advice from their inhouse counsel that they were acting contrary to the contracts.  We have no way of knowning of course because none of us has access to how the decison was taken to go down this route.  I'm surprised the Central bank hasn't asked the banks how it happened.  And asked for the revelevant notes from the meetings on this.


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## Brendan Burgess (11 Apr 2017)

Bronte said:


> decided to intentionally deprive customers of tehir contractual rights knowingly than the intention to defraud is surely there.



Bronte, that is a huge "if".  I have not seen any case where there was a clear contractual right not upheld.  In every case, the bank had a different interpretation of the contract. To be fair to the lenders, in most cases they were clearly within their contractual rights, but they lost their cases with the FSO because they did not explain things , e.g. the implications of fixing, clearly enough.




Bronte said:


> It would be even more so if they had legal advice from their inhouse counsel that they were acting contrary to the contracts.



If they had clear and unambiguous advice that they were in breach of their contracts, then that would be serious. I would doubt that they did anything in clear breach of contract.

For example, the most glaringly obvious wrong issue as far as I am concerned is AIB setting the prevailing rate in retrospect.  But it's their interpretation of the contract.  I don't think that the Central Bank should tolerate it. But I don't regard AIB's stance as criminal or fraudulent.


Brendan


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## moneymakeover (11 Apr 2017)

Brendan

Taking one example

Some Aib contracts had three options, one of which was tracker.

AIB managed to interpret this so as not to return customers to tracker.

I think their justification was that trackers were discontinued.

Clear breach of contract. 

Indefensible.

To me that's fraud.

15,000 customers in total have been rightly returned.

But others still have not.

I don't think it's helpful to have a "consumer advocate" making excuses for the banks.


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## Brendan Burgess (11 Apr 2017)

moneymakeover said:


> Some Aib contracts had three options, one of which was tracker.
> 
> AIB managed to interpret this so as not to return customers to tracker.
> 
> ...



It's fairly clear to me that they should have offered trackers to these borrowers. 

It's also clear to me that their interpretation was reasonable and yet open to challenge. 

It is absolutely defensible, even if I disagree with them.

And it's absolutely not fraud. 

Brendan


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## Jim2007 (11 Apr 2017)

moneymakeover said:


> I don't think it's helpful to have a "consumer advocate" making excuses for the banks.



So it is not OK for the bank to deceive, lie etc... but it is OK if it is to your benefit!


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## Jim2007 (11 Apr 2017)

Bronte said:


> Do you not think that the decision to remove trackers was taken at a high level, that it was deliberate and there was some intention there to do so.  Obviously the intention was to make more money for the banks on the loss making trackers, but if they sat at a board meeting and decided to intentionally deprive customers of tehir contractual rights knowingly than the intention to defraud is surely there.



Banks sell product like any other company and of course if they have a loss make they will discontinue it.  Indeed it could be argued that they have an obligation to their shareholders to exit such products as soon as possible.  You cannot claim that such behaviour is criminal in one company and fine in another company, just because it happens to impact you.


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## nonie (11 Apr 2017)

Am I missing something here? Who are the consumer advocates and for which banks?


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## odyssey06 (11 Apr 2017)

Jim2007 said:


> Banks sell product like any other company and of course if they have a loss make they will discontinue it.  Indeed it could be argued that they have an obligation to their shareholders to exit such products as soon as possible.  You cannot claim that such behaviour is criminal in one company and fine in another company, just because it happens to impact you.



They can exit *offering* such products, but they entered into a legally binding contract to provide the product which they have to honour.
I think there was a deliberate decision taken to interpret the contracts in such a way as to favour the banks.
There was breach of contract, no doubt.

Was there legal fraud? I'm not sure. The bar as Brendan notes is quite high, and I think we should respect his opinion on that.
I think in some jurisdictions it would be considered a criminal case. I have no doubt if this happened in the USA, we would have seen perp walks of banking staff in handcuffs by now.
But even if it was criminal in Ireland I would not trust AGS to progress it.

Was it ethical (i.e. professional) fraud? Yes, for sure. I have no doubt that there was a *deliberate*, *concerted*, *conscious *attempt to pull the wool over the eyes of customers, to the advantage of the banks - customers to whom they have contractual and professional responsibilities.
*Everyone *involved if this should be identified and stripped of *all *qualified financial advisor qualifications and all professional certifications and reset to zero - and for those at director level, disbarred for such responsibilities. If that means *people lose their jobs*, so be it.
They had a chance to honour their professional ethical responsibilties, they failed.
If jobs were lost, this would never happen again, because the staff would say *no*, if we do this, our jobs are at risk.


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