Update on Examination of Tracker Mortgage issues - Information for consumers

What is the latest position with the Tracker Examination announced last year?

As set out in previous updates 2 October 2015 and 22 December 2015, the Central Bank is undertaking an examination of tracker mortgage-related issues covering, among other things, transparency of communications with and contractual rights of tracker mortgage customers.

The Central Bank’s consumer protection framework requires all lenders to act in their consumers’ best interests, which includes disclosing material information to consumers in a manner which seeks to inform them. Such disclosure is critical to enabling consumers to make informed decisions and is a core principle of the Examination.

The initial phase of the Examination required lenders to put plans and frameworks in place by the end of March 2016, in line with principles prescribed by the Central Bank. This phase includes the requirement for appropriate governance and reporting structures to be put in place to deliver on the Examination Framework as set out by the Central Bank. These plans have now been received and are currently being reviewed.

The scale and complexity of this examination means that this work will be ongoing through 2016 and will conclude in 2017.

What do lenders have to do now that plans have been submitted?

Lenders are now required to move to the next phase of their reviews and identify any customers who may have been impacted by:

• the lender’s failure to honour a customer’s contractual entitlements or
• its failure to comply with the regulatory requirements regarding disclosure and transparency of information.

Lenders have appointed external independent third party assurers to oversee this work and to ensure that the review is being carried out in line with the Central Bank’s requirements.

When will consumers find out if they have been impacted?

The Central Bank expects lenders to communicate with all impacted customers in a timely and clear way. Some customers may be contacted sooner than others, depending on the speed of progress being made by their lender in completing the Examination.

Lenders are also expected to have the necessary staff and systems in place to deal with customers’ queries in an accurate and timely manner throughout the course of the Examination.

What will happen if I am impacted?

The Examination framework provides that when impacted customers are identified; in the first instance, lenders must stop charging the incorrect rate of interest on the customer’s account to ensure that any further customer detriment is stopped as early as possible and communicate this to the customer.

Once a full review of the customer’s account is complete, lenders will issue a letter to the customer explaining the nature of the error, the correct rate to apply to the customer’s account and information on the next steps in the Examination, including the redress and compensation process.

Lenders are required to treat the review of all customer accounts within the scope of the Examination in the same way, regardless of whether the customer has previously made a complaint to the lender or to the Financial Services Ombudsman.

When will further information on the Examination be available?

A further update on progress with the Examination will be issued at the end of July.