Explainer - Tracker Mortgage Examination - Frequently Asked Questions

Your lender will have contacted you if you are affected by the Examination. As the Examination covers all mortgage accounts that had, or may have had, an entitlement to a tracker rate, you don’t need to take any action in order to be added to the Examination’s scope.

Under the Framework set down by the Central Bank for conducting the Examination, lenders are required to write to affected customers when they are identified and rectify their mortgage interest rate to prevent further detriment.

It should be noted that rate rectification may not be applicable in some cases. For example, where the mortgage has been redeemed or closed there is no open account with the lender to amend the incorrect rates of interest being charged.

Following the full review of the mortgage account, lenders are required to write to all affected customers and provide redress and compensation as appropriate.

The Examination covers all lenders that offered tracker mortgages to customers, including mortgages used for a family home or an investment property. The Examination covers the time from when lenders started to offer tracker mortgages, up to the end of 2015. This involves the initial review of more than two million mortgage accounts by lenders. Lenders are required to identify all customers affected by tracker mortgage issues at any time in the past.

Mortgage accounts that have been redeemed, sold or transferred to another entity by a lender, as well as mortgage accounts where the customer has lost possession of the secured property for any reason (including by way of voluntary and involuntary sale) are within scope of the Examination.

As at end-May 2019, c.40,100 accounts have been identified by lenders where a right to, or the option of, a tracker rate of interest and/or the correct tracker rate of interest was not provided to customers in accordance with lenders’ contractual or regulatory requirements.

The Central Bank is satisfied that all affected groups of customers have now been identified.

• The redress payment is to return the affected customer to the position that he/she would have been in had the relevant issue not arisen. This involves moving the customer to the correct interest rate and refunding any overpayments made due to the lender’s error. The redress payment should take into account the fact that the customer did not have access to these funds for this period.
• The payment of compensation is to reflect the detriment suffered by affected customers. Compensation, therefore, is in addition to the redress payment.
• As at end-May 2019, lenders have paid affected customers €683m in redress and compensation on tracker-related cases. More payments will follow as lenders progress redress and compensation.

98% of affected customer accounts already identified and verified have now received offers of redress and compensation. A small number of customers who are contactable remain to be paid redress and compensation.

Following extensive and supervisory challenge and assurance work the supervisory phase of the Examination has now closed. However the Central Bank’s work in relation to tracker mortgage related issues is not over. Our work continues with ongoing enforcement investigations where we are seeking to determine how and why customer detriment happened.

Lenders have been required to establish independent appeals panels, specifically to deal with customers who are not satisfied with any aspect of the redress and compensation offers that they receive from lenders. Details of the appeals panel and the process will be set out by lenders when writing to their customers regarding redress and compensation.

It is important to note that customers can accept the redress and compensation offered and still make an appeal. Redress and compensation offers cannot be reduced by virtue of a customer lodging an appeal.

The Central Bank expects lenders’ reviews to deliver fair outcomes for customers through the provision of appropriate redress and compensation. However, the Central Bank believes that the appeals process is a very important part of the overall framework. This is to ensure that there is an independent and transparent process in place for any affected customer who feels that their particular circumstances were not appropriately considered.

In addition to redress and compensation, affected customers will receive a separate payment which can be used by the customer to pay for independent advice on the adequacy of their lender's redress and compensation offer.

You should contact your lender if you have a query or complaint. Lenders are required to identify and include all affected customers for redress and compensation. Any query to your lender about your individual case must be responded to in accordance with the framework of the Examination.

Yes. Enforcement investigations have been conducted in parallel with the Central Bank’s supervisory engagement and the supervisory outcomes are feeding into the scope of the enforcement investigations. These investigations are at different stages so they will conclude on different timelines. The Central Bank has recently completed the first enforcement investigations against one of the six main lenders. More are expected to follow.

Repossessions are not to occur while individual cases are being assessed under the Examination to determine if they are affected.

Mortgage Interest Relief – or Tax Relief at Source (TRS) – is a form of tax relief based on the amount of interest paid on a mortgage loan. If you were overcharged by your lender due to a tracker mortgage related issue you may have received additional TRS credited to you. The Central Bank’s Tracker Examination Framework requires lenders to pay any tax charges that may be due as a result of redress, compensation or other payments made to affected customers. This includes TRS. No adjustment/deduction should be made to your redress and compensation payment in respect of tax charges. Your lender will liaise directly with Revenue in relation to the payment and you do not need to take any action.

Customers who disagree that their mortgage is out of the scope of the examination can, if they wish, take a case to the Financial Services and Pensions Ombudsman (FSPO). This is a statutory officer who deals independently with complaints from consumers about regulated financial service providers and pension providers. Making a complaint to the FSPO is free and decisions can be appealed to the High Court.