Robbie Gallagher (Fianna Fail) | Oireachtas source

I welcome the Minister of State. The Central Bank has recently confirmed that large numbers of mortgage holders whose loans were sold to vulture funds are unable to use the ombudsman service to make complaints if they are in dispute over the handling of their loans. It is estimated that up to 100,000 borrowers have had mortgages sold to vulture funds, with credit servicing firms acting on behalf of the funds.

We now know that a legal loophole exists whereby thousands of people have no access to the Financial Services and Pensions Ombudsman, FSPO, and, therefore, do not have the same rights and protections as others. The loophole appears to have arisen between 2015, when the credit servicing Bill came into effect, and 2019, when it was tightened up to regulate credit services that act for the funds, which have since then been required to register with the Central Bank. The ombudsman is an independent and free service that helps resolve complaints from consumers with financial institutions. The Central Bank has admitted the issue needs to be rectified. It is not acceptable that customers may have serious and distressing issues but cannot complain when they have not had a satisfactory response from the regulated entity.

I understand it is now up to the Legislature to close the loophole. Tens of thousands of people do not have access to the financial services ombudsman and we need to rectify this immediately. People look to the Central Bank for independent analysis and fairness and all consumers should be equally protected. The Central Bank accepts that the ombudsman has determined it is limited in its jurisdiction because the underlying loan owner from the period 2015 to 2019 is not designated as a regulated financial services provider. This is a new determination. Apparently, the system was not aware of that decision until now, so it is urgent that the ombudsman be supported in every way to close that gap. Otherwise, options are limited for those affected.

These people cannot be expected to spend thousands on legal fees and barristers to rectify this issue. People should be able to make legitimate complaints about their financial services packages regardless of the complexity. Right now, the system is not equitable in that if one person is with a vulture fund and another has their mortgage with AIB, Bank of Ireland or PTSB, one can take their complaints to the FSPO, while the other cannot. This is not acceptable and it is time it was fixed. Many of these mortgage holders have had their loans sold without their knowledge or consent. Now they are at the mercy of vulture funds.

This gap needs to be filled immediately, and if legislation needs to be introduced, it should be done as an emergency. I appeal to those vulture funds to treat people with dignity and respect and not to try to gouge them for the last cent they have. That is simply not good enough, and we as a Government should not stand over any mechanism that allows that behaviour to exist.