The trickle of stories from people wrongly taken off tracker mortgages by banks in the wake of the financial collapse turned into a flood in October when the impact of the bank’s actions on the lives of thousands was laid bare before the Oireachtas committee on finance.
Four homeowners wrongly taken off trackers by Permanent TSB and Ulster Bank and then forced to pay tens of thousands of euro more than was necessary in repayments told parliamentarians of the toll the struggle had on their health and wellbeing. They spoke of a lost decade in which they were robbed of financial independence and bullied by bankers.
Thomas Ryan and his wife Claire were reluctant poster children for the scandal. Their difficulties with PTSB saw them pay mortgage interest of €4,290 a month rather than €2,090 for years and took them through the Financial Services Ombudsman office and the High Court and into the glare of publicity in Leinster House.
At the Oireachtas hearing, Ryan spoke of a struggle which still continues and he outlined the horrendous impact it had had on his family. “I suffered a stroke in 2013 and my wife suffered a nervous breakdown into 2015,” he said adding that the “conditions are medically attributable to enormous stress” and saying that the “life-changing traumas are etched on our lives forever”.
His story – and many like it – took far too long to come to the surface and had it not been for the Oireachtas committee, it – and all the others – may never have come to light at all.
For years up until 2015, there were murmurs banks were forcing people off trackers but it was not until that summer that a sort of climax was reached in the courts when PTSB lost a case taken by two couples who had claimed their tracker-mortgage accounts had been mismanaged by the bank.
It then emerged that PTSB and a subsidiary had mismanaged the accounts of almost 1,400 mortgage customers with the result that some people lost their homes. The case prompted an investigation by the Central Bank into PTSB and then into the State’s other mortgage lenders.
The scandal grew slowly but it quickly became clear – as the committee heard – that it was going to be one of the “worst consumer rip-offs in the history of the State”.
Last December, the Central Bank disclosed “at least” 8,200 homeowners had been improperly denied trackers by lenders and said the number affected by the scandal could be as high as 15,000. Over the course of 2017, the number climbed and climbed and as Christmas approached it had hit 33,700.
Financial adviser Padraic Kissane has been fighting on behalf of wronged tracker holders for almost 10 years and he told the committee that the experiences of his clients who appeared in before it were "reflective of customers across all lenders and representative of thousands of lives". He accused 15 banks caught up in the scandal of having "a collective lack of empathy" and consistently displaying a "condescending" attitude to the customers they had wronged.
He said banks had simply “assumed customers would roll over” and he referred to “hollow apologies and continued trickery” and asked what – if any – “moral compass do they possess”?
He got an answer of sorts at a subsequent committee hearing when the Central Bank governor Philip Lane said there was an issue with the culture of the banking system.
“We do think there is a common culture across the banks, which is that if there is any doubt or ambiguity about how to interpret a contract, they interpret it in the bank’s favour.” He added he believed that the banks had a culture of seeking profitability at the detriment of their customers.
Running out of patience
After Kissane's clients went public everything seemed to change. The Minister for Finance Paschal Donohoe called the banks in for meetings and warned them to get their houses in order while the Taoiseach Leo Varadkar said he was running out of patience with the pace of the banks' investigations.
The Central Bank told the same committee at a subsequent hearing that it was working with An Garda Síochána and other State agencies in relation to the scandal, although it stopped short of saying a criminal investigation was under way.
The regulator’s director general for financial conduct Derville Rowland said she “couldn’t say” if criminal proceedings would come in the wake of its investigation into 11 of the 15 lenders involved in the scandal, but confirmed it had twice met gardaí to discuss the issue.
At the same hearing the Central Bank was likened to the "dog that doesn't bark" by Sinn Féin TD Pearse Doherty while Fianna Fáil TD Michael McGrath described it as "one of the greatest consumer rip-offs in our State".
The chairman of the Oireachtas committee John McGuinness later launched a scathing attack on the competition authority and the ombudsman accusing both of failing to protect tracker-mortgage customers from being "ripped off" by banks.
He said the agencies had done nothing to lift the lid on the overcharging scandal since it first emerged in 2009 or to help those seeking redress and were acting as if they were afraid of the banks.
At a committee hearing attended by the chair of the Competition and Consumer Protection Commission, Isolde Goggin, and the ombudsman, Ger Deering, McGuinness said consumers had been left high and dry by the agencies that were meant to protect them.
The powers that be denied the charges and insisted that the Central Bank was the best place for the investigations to take place.
The wheels are still moving slowly and many of those who were left impoverished by the banks actions are still waiting for redress. Others who lost their homes – and maybe even their lives as a result of the stress – will never get full redress.
