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PERMANENT TSB FACES having to make a massive pay-out to some mortgage customers, over failures to warn holders of fixed mortgages of the consequences of breaking the terms of their contracts.
The lender has withdrawn appeals to the Supreme Court relating to four customers who broke the terms of their mortgages early, and subsequently wanted to move to tracker rates.
The deals the mortgage holders had been on included a provision that they could move to a tracker, once a fixed rate term had expired.
However, as they had chosen to break with the fixed rate agreement early, the bank didn’t let them to revert to a tracker.
The customers’ complaints to the Financial Services Ombudsman were upheld — and, in turn, that ruling was also upheld by the High Court in 2012.
The lender had been planning to take the case to the highest court in the land — but has now confirmed the appeals have been withdrawn.
Not enough info
The FSO had found that the bank had erred by not providing the customers with all possible information about the consequences at the time they decided to break from the fixed term.
Permanent TSB now says it wishes to review around 80 similar complaints lodged with the FSO, which the financial watchdog had decided not to issue a decision on pending the outcome of the Supreme Court case.
A spokesman for Permanent TSB said in a statement that the bank was also reviewing how it had dealt with all cases of customers in similar positions.
The review “will be concluded and any affected customers will be advised in writing if they are to receive redress as soon as possible,” the statement said.
A Reuters report published last night estimates that the lender may have to compensate as many as 2,000 customers.
This issue is also subject to an ongoing enforcement investigation by the Central Bank.
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The bank was probably just shocked that there was a mortgage holder out there with enough money to keep dragging them through the courts to challenge them so they had to give up.
Hope they hammer that shower
Variable rate customers will have to take up the tab now.
They should take the lump sum and immediately use it to pay down their mortgage. Knock a few years off the mortgage and save more money
Not if they’re on trackers…. If the ECB rate started going up then consider paying off the mortgage .
chances are if you wait till the rates start going up you’ll have spent most of that money.
Is it better to use a lump sum to reduce your scheduled monthly repayments or to reduce your original term?
Fintan so you think it’s best to wait to rates go up and then pay it of, why wait for that to happen. Only time you would do that is if you had more expensive debt pay it off first. I would use the lump to pay down the balance and then keep your payments same and you will win in both counts.
@paul – depends on your circumstances. If you are managing your monthly repayments, then use the lump sum to reduce the term of the mortgage, this will save you interest in the long run as the mortgage would be paid off sooner.
If you are finding the monthly repayments a bit much use the lump sum to reduce payments and kept the term of mortgage as is. Would not save you on the interest of the mortgage, but would make things financially easier for you on a monthly basis. If you did this option and further down the line you could afford to pay more of your mortgage each month, you can opt to do overpayments eg. An extra €50/100 or whatever each month. Overpaying would clear the mortgage earlier also and reduce the amount of overall interest paid.
Hope I’ve explained that ok!
Not really a windfall just their own money back
Spot on Thierry.
These victims should be paid compensation on top of their refunds.
This was a dirty intentional campaign ran by Permanent TSB back in January/early February 2009.
What the article above omits to say is that the bank intentionally rang up customers who were on fixed rates
(that were due to revert to trackers) and said they could leave their fixed rates with “no penalties” (which were usually penalties of €3K-€4K-€5K+).
They also told these customers that that they had given up their tracker rate when they took out their fixed rate and that going on the Standard Variable Rate “without penalties” was a “great deal” and their only option for saving a few euro.
This dirty campaign by the bank, drove many customers into 6 years of financial distress, mortgage arrears, repossession, eviction, homelessness, poverty and other dark endings.
The only reason they are backing off now is because most of these customers are outside of the Financial Ombudsman’s 6 year time limit on complaints due to Permanent TSB dragging things out for so long through the courts.
https://www.financialombudsman.ie/make-a-complaint/
On an modest €250,000, 25 year mortgage, the bank could make an extra €200,000 if they conned a customer out of their tracker rate and onto the banks standard variable rate.
This was what Permanent TSB was doing to the very people who saved it’s greazy selfish dishonest bacon.
Disgusting!!
There needs to be a kind of middle man between the government (who look out for citizens best interests) and banks (who look out for their own profits and interests).. We need a referee, a fair play man… A kind of financial regulator…. Wait a minute??????
Variable rate customers will have to take up the tab now.
The banks need to be careful from being exposed for the legalised fraudulent occult organisations that they are.
Good for them,love to see those weaselly filth warts take a good dose of their own medicine,despicable c u next Tuesdays.
Guess who’ll end up paying for that
Serious question but if these people have up trackers, presumably this was because they received some short term pay off to trick them into giving up long term benefit.
Will they have to give that back?
We seem to constantly be removing the consequences of people’s decisions. What happened to treating people like adults. caveat emptor was thought to us at age 12
This was an intentional corrupt campaign by the bank to con thousands of customers out of their trackers.
It was so slimy that the bank didn’t even right up contracts for the switchers.
These people deserve compensation.
The stress could have prematurely ended the lives of many, and may have done just that.
Demonic behaviour.
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