Thursday, 22 November 2018
Ceisteanna Eile - Other Questions
Tracker Mortgage Examination
9. To ask the Minister for Finance if his attention has been drawn to the fact that the victims of the tracker mortgage scandal have established that in the case of at least one bank (details supplied), the independent appeals board examining their appeal was not provided with all records pertaining to their case; if this is common practice across the banks; and if he will make a statement on the matter. [48596/18]
15. To ask the Minister for Finance the status of the tracker mortgage examination; the amount paid out to date for redress and compensation; when all affected customers will receive payment; and if he will make a statement on the matter. [48565/18]
I have been contacted by a victim of the tracker scandal with some extremely alarming information. This family's appeal to the Ulster Bank's independent appeals process turned out to be a complete and utter joke. The only document related to her case that the appeal board received from the bank was a document relating to the compensation that was ordered. Is the Minister aware that this practice is taking place in Ulster Bank and what will he do about it?
I propose to take Questions Nos. 9 and 15 together.
Appeals form an important part of the overall tracker mortgage examination process as they ensure an independent and transparent consideration of complaints from customers about any aspect of the redress and compensation they have been offered.
The Central Bank advises that, as part of the framework for conducting the tracker examination, lenders are required to put in place an appeals process as set out by the Central Bank. The Central Bank expects that lenders have put in place the necessary processes to ensure the appeals panel can operate in accordance with the requirements of the tracker framework, including that all relevant and available information which an appeal panel requests is provided by the lender to the panel so that it may consider and decide upon an appeal.
Where a customer who has appealed remains dissatisfied with the outcome of the appeal and does not accept the findings of the appeals panel, he or she retains the option to bring a complaint to the Financial Services and Pensions Ombudsman. The Deputy might indicate if he knows whether this has happened in the case he raised. The Central Bank does not have a detailed role in the operation of the appeals process. If the Deputy provides information on a particular case, including the case he raised, directly to the Central Bank, the bank will consider any information provided.
On Deputy Michael McGrath's question, Deputies will be aware that the Governor of the Central Bank provided an update when he attended a meeting of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on 4 October. At that meeting, he indicated that, as of the end of August, lenders had identified 38,400 affected customers and paid €580 million in redress and compensation. The redress and compensation phases of the tracker mortgage examination are now significantly advanced, with 93% of affected customer accounts identified and verified and they had received offers of redress and compensation by 31 August.
I know the Minister and the Central Bank want to move on from this scandal and the banks are talking about returning to normality, restoring bonuses and so on. This case relates to a couple who submitted an appeal in June 2018. There has been correspondence back and forth between them and the BDO Ireland secretariat, which oversees the independent appeals process for Ulster Bank. BDO requested some additional information from this family relating to their mortgage account. This concerned the family because the request indicated that BDO either had not read the mortgage account file or did not have a copy of it. Two weeks ago, the couple posed the question of whether BDO was capable of adjudicating on the appeal fairly and stated they had lost faith in the appeals process. The appeals board finally came back to them and confirmed that, as an independent secretariat, it only has access to the mortgage account details provided to it. In the case of Ulster Bank, this means BDO only has the compensation letter. It does not have the mortgage file or any other documentation. This raises serious questions about the whole point of the independent appeals process within Ulster Bank and possibly other banks. The latest information available to me indicates that Ulster Bank has identified 3,490 customers who were impacted by this scandal, 472 appeals packs have been dispatched, 81 have resubmitted and 20 appeals have been heard, only one quarter of which have been upheld.
The Minister must take action on this. He needs to ensure that Ulster Bank is providing all the detail to the independent appeals process because it is a complete sham if the only thing the appeals process has is the compensation letter and it must adjudicate based on that.
I do not know how Deputy Doherty can credibly put forward the allegation that I am looking to move beyond this when I have been crystal clear at all points that I believe the behaviour that caused this issue and the way in which it was dealt with recently were unacceptable. I have been very firm and clear in my support of the Central Bank and the work it is doing. Some €580 million has been returned to citizens. This was their money in the first place.
The Deputy will be aware that I made changes regarding the sanctions available in this area, including increasing to €500,000 the level of compensation the Financial Services and Pensions Ombudsman may award. How the Deputy can deduce from my public statements on this matter, my engagement with the banks and the support that I have offered the Central Bank that I want to move beyond this issue is not clear to me. I reiterate that if he wishes to share the information he has on the case of his constituent with the Central Bank, it has indicated it will examine the matter. Has the family in question had an opportunity to take this matter to the Ombudsman?
My question relates to the tracker examination at a broader level. It is now three years since the tracker investigation commenced. As of last month, the most recent update to the finance committee from the Governor of the Central Bank was to the effect that 10% of the identified effected customers had still not received redress and compensation. In effect, they have still not been given back their money. These are identified customers. In this examination, there are 31,300 effected customers, of whom 28,100 have received redress and compensation. Within this group of 28,100 there are disputes, and they will continue, but there remain more than 3,000 customers which the banks have identified and who have still not got their money back. They have not received compensation or redress. There is no deadline or end date for all of this. This examination has been ongoing for three years, yet 10% of the customers involved, or 3,000 people, have not got their money back. This scandal must be brought to an end. It is bad enough that this happened in the first place, but the way in which it has been handled and the fact it has been allowed to drag on while people continue to be out of pocket are not acceptable.
My most recent figures indicate some 93% of verified affected customers have received offers of redress and compensation. I want to see the matter concluded quickly. The fact that some 93% of customers, that is, our citizens, have been offered redress and compensation is of little solace to me or them, given how long all of this has gone on. It is unacceptable that it happened in the first place.
From my engagement with the Central Bank, I know it is devoting considerable resources and effort to try to ensure this matter is brought to a conclusion. It indicated it has identified the vast majority of people who it believes were affected. I want to see this matter brought to a conclusion and I know the Central Bank feels the same. It is and was a breach of trust on top of everything else we went through between Irish banks and our society. It is one of the key reasons that, as I indicated and discussed at last month's priority questions, I want to introduce a new individual accountability regime for banks based in Ireland next year.
This individual who is going through the appeals process was able to ensure her mortgage file reached the independent appeals process. The mortgage file cannot be provided unless consent is given by the mortgage holder, yet mortgage holders, that is, the victims of the tracker scandal, do not know that consent is needed and the independent appeals process panels are not asking them for consent. There is no concern for the individuals, but one could fill one's boot with the paperwork that relates to this individual's file. The only documentation from the bank that the independent appeals process had for adjudicating in her appeal was the letter of compensation. This is likely to happen across Ulster Bank customers, but if it is the process in Ulster Bank it is likely to be the same across the board.
The Minister may say the woman can go to the Ombudsman, which is true, but Deputy Donohoe is the Minister for Finance. I told him it is probably happening in other banks and we must ensure it is not. On behalf of the people, the Minister is the majority shareholder in AIB and Permanent TSB, and is a significant shareholder in other banks. He meets representatives of the banks and the Central Bank, but the Central Bank will not deal with any individual. Will he take this matter on board? I put the information on the record and I will write to him, as I have done with the Central Bank. He should raise it with the Central Bank, Ulster Bank and the other banks to ensure all the information relevant to a customer's file is provided to the independent appeals process in order that justice can visibly be served.
On the numbers, the figure of 93% was reached by including the 7,100 pre-examination cases, which go back a number of years. We teased all of this out on Committee Stage. The figure in the current examination is 10%, which is more than 3,000 customers who have still not received redress and compensation. The banks know who they are, their name, their address, their mortgage account number and how much they are owed, yet they remain unpaid and out of pocket to this day, which is not acceptable. We and, more importantly, the people who were affected need the Minister and the Central Bank to inform them when they will get their money back. The issues of accountability and the outstanding disputed cases will have to be resolved, which will take time, but these are identified cases, of which there are still more than 3,000, or 10%.
On Deputy Pearse Doherty's point, I repeat what I said from the start. The Central Bank indicated that if the individual's information is shared with it, it will examine the information. On his request to raise the matter with the Central Bank, I will do so and I am determined to ensure this further breach of trust is dealt with in the most robust way possible.
On Deputy Michael McGrath's question, I know that he dealt with this matter as recently as early October. He is correct that the figures I provided include the 7,100 cases that had been identified, but this year there has been an increase of 1,300 in the number of customers who have been identified as affected since March. The number is growing, therefore, which was communicated to the Deputy by the Central Bank.
I cannot give an exact time by which everybody will have his or her money back, but I want it to happen as soon as possible. I will continue to engage with the Central Bank to see if I need to give it any further support to make that happen. In the particular cohort of cases with which we are dealing, as we approach this phase of the inquiry, some of them will be even more difficult and even more demanding. Like both Deputies, I have met people who were affected by the matter. Deputy Pearse Doherty referred to a bootful of correspondence, and I have seen the scale of correspondence that some people have had the trauma of having to process. I am fully committed to ensuring this matter is dealt with as effectively as possible.