Mr. William Praskifka:

The office has had an enormous amount of experience of the issue of tracker mortgages, particularly from when I first started. One of the big issues then was breaker fees relating to these mortgages. Then the issue arose of the entitlement to trackers in circumstances in which the Chairman outlined where a party takes out a tracker mortgage and goes on to a fixed rate before coming off it to find that the tracker has been withdrawn to the public. Currently, in our work we do not see as many mortgage complaints about trackers as we did. Most of the complaints relate to the mortgage arrears process. With regard to tracker mortgages, when we first took jurisdiction over these cases and began to decide on them, we noticed some financial institutions were learning from our decisions. We had made decisions where people were entitled to tracker rates. Our basic methodology is the subject of a High Court case, which has been appealed to the Supreme Court, but, as the High Court judge properly noted, we take the view that if someone is on a tracker rate and there are circumstances in which the bank asserts he or she is not entitled to it, the underlying documentation has to be clear and understandable to a layman. That is our methodology and the court upheld our decision in that case to put someone back on a tracker mortgage. That case is on appeal to the Supreme Court.

The simple answer to the Chairman's question on our jurisdiction is that our decisions are legally binding on the parties to the complaint. They are binding on the complainant and the regulated financial service provider. They do not create a precedent but in circumstances where we believe the issue is much larger than applies to the parties in a case, whether it relates to tracker rates or any other area, that is the kind of case we refer to the Central Bank. The bank has the powers to investigate the companies and to look back in terms of all their documentation. It has other powers, including levying fines, and the ultimate power is to revoke someone's licence. Our power is simply limited to issuing a decision that is binding on the parties in a case and our decisions are legally binding.