PermTSB Tracker Redress Scheme – Desperate Measures on Tracker Mortgages Scandal


Because of a series of Bad Calls made over the previous 15-years, in a Tsunami of reckless lending activities the exposures to Bank balance sheets became such that the majority of Tracker Mortgages were a major source of recurring business losses. This has been particularly true of Permanent TSB., and its enforced commencement of its Tracker Mortgage Redress Scheme.

To counter-balance this, the Banks [collectively and individually] evolved a Customer Handling Strategy whereby affected Borrowers were cajoled, by-hook-or-by-crook to forfeit their rights as Tracker Mortgage Borrowers. As a direct consequence of being very deliberately inveigled into moving-off Trackers, without being appraised of their Rights as Consumers at the time, Borrowers (to date, and into the future) have been charged very substantial volumes of mortgage interest. Indeed it has been demonstrated that in the case of Permanent TSB., more than 22-affected Home Owners actually had to under a forced-sale of their Private Residences.

Scale of Tracker Scandal in PermTSB Tracker Redress:

Recent media estimates indicate that what is now legitimately referred to as the Tracker Scandal is expected to cost PermTSB Tracker Redress, alone at least €35m in reimbursements to customers together with an additional €20m in Central Bank fines. Such mortgages are a carry-over from the pre-2008 Banking boom  when Irish banks could borrow virtually unlimited amounts from mainland European banks at or close to official ECB rates (see Previous Blog on Government & Banks acted in consort to fuel reckless lending). Those days are long gone, and Irish Banks have been caught ‘with-their-trousers-down’ but the tracker contracts remain in force, with the recently-released Central Bank statistics showing that 47% of all mortgaged owner-occupied properties and 68% of buy-to-lets/ Investment Properties are on Tracker Mortgages.

It has now become clear that Permanent TSB in its PermTSB Tracker Redress was not the only Offender in this activity, several other banks have previously (and are continuing to be) engaged in these highly questionable & deliberate customer handling strategies. ‘Overseers’  of PermTSB Tracker Redress are apparently reluctant to produce a basis of calculation ( as furnished by their own alleged Experts) which doesn’t instill confidence in their stated contrite goodwill that accompanies their enforced tight timescale for affected Borrowers to take up the offer of redress.

Historically, Tracker Mortgages were availed of – priced at ‘Cost-of-Funds’ (or EURIBOR) with typical margin mark-up 0.75% or 1%, over official ECB rates. With the official ECB rate now set at 0.05% – Borrowers who have managed to successfully counter-argue with their Banks’ by not going off-tracker,  are still paying an interest rate of 1.05% or under.

Recent media reports indicate that Bank of Ireland is being taken-to-task by the Central Bank over letters it sent to Tracker Mortgage borrowers advising them of its fixed mortgage rates while, at the same time being ‘economical with the truth’ in outlining the costs discontinuing a pre-existing Tracker Mortgage. The Central Bank launched an industry-wide probe of tracker mortgages in the wake of the PTSB debacle, but to date this has apparently led nowhere.

The entities that have been mandated by the Government to protect Consumers from such potentially illegal & fraudulent Bank activities have been showing their gums (as opposed to their alleged watchdog’s sharp-teeth) are the Financial Services Ombudsman[FSO] and the Central Bank{CB]. No positive & all-embracing solutions have been offered to Borrowers. This is an indication of continuing inappropriate light-touch regulation right up to date & continuing into the future. In fact there are an unknown number of foreclosed-Borrowers who do not have a Home-owning future because of these Bank activities. These unfortunate swindled Borrowers don’t even now have a way of discovering if there was a ‘cause & affect’ relationship with their ‘confiscated’ Tracker Mortgage & the subsequent forced sale/ repossession of their Family Home

Just because the Irish State still owns majority shareholdings in both Permanent TSB and AIB Bank, doesn’t mean that our broke-state can (through its agencies in the form of the CB and the FSO) keep on dodging the hail of bullets, that is the great Tracker Mortgage Scandal within PermTSB Tracker Redress.