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00:00I don't know what a tracker mortgage is.
00:03I don't know how to save money.
00:05This is the inside story of Ireland's tracker mortgage scandal.
00:11The single biggest overcharging scandal in the history of the state.
00:18It's early 2016 and the central bank has ordered the state's main financial institutions
00:24to review their tracker mortgage cases.
00:28With a tracker your mortgage tracked the European Central Bank's rate
00:33plus small margin for the bank.
00:36That was supposed to be clear and upfront.
00:39The regulator is concerned that the scale of the tracker mortgage scandal
00:44is far higher than the banks.
00:47Many of them the same ones we bailed out are letting on.
00:51For years they've tried to downplay their exposure to the tracker mortgage issue.
00:57Now, it's finally time for a reckoning.
01:08I ran a very small ad in the personal section of the Times in the end of...
01:11Financial advisor Pora Kisan, who's been one of the most outspoken critics of the bank's behaviour,
01:16is once again inundated with calls from anxious customers.
01:20So clients are ringing me.
01:22I mean we were getting buckets of calls because I was doing an awful lot of media work.
01:27I was nearly becoming the face of it from the customer's perspective in some cases
01:31because I haven't dealt with everybody.
01:36I play soccer twice a week.
01:38I found it a fantastic release.
01:41This was a great opportunity to just switch off.
01:44And no, I didn't have to think about anything for a couple of hours.
01:48Just playing with the lads, playing with my mates.
01:51The central bank's tracker mortgage investigation marks a major shift.
01:55I always bring my own ball.
01:57Where previously tracker mortgage victims, unhappy with their bank's response,
02:01would pursue their cases directly with the independent financial ombudsman.
02:06That whole process is paused while the banks themselves determine
02:10whether their own customers have been wrongly denied a tracker.
02:13Are you kidding?
02:14The question had changed.
02:15It wasn't, do you think I have a case?
02:18It became, do you think I'll be deemed impacted?
02:21Peter, give him an option.
02:23The central bank have said there's going to be a broad-based investigation into trackers.
02:28But the scope of that was where I got concerned.
02:31Oh, for fuck.
02:33Because I have all this information here and I'm going,
02:36how am I going to ensure that they get it corrected completely?
02:41How do I ensure that nobody's left behind?
02:43Drop across, one or two, drop across.
02:46I certainly would have had an enormous amount of meetings in early 16,
02:49helping to scope the investigation.
02:52And that's where the work level started to really, really ramp up
02:56in terms of, I'm now informing the unit, the investigative unit of the central bank,
03:02to make sure that the investigation is done right.
03:05If you miss this, it's going to be hilarious.
03:07Yeah, we could be here for half an hour.
03:15But could the damage caused by the tracker mortgage scandal have been stopped years earlier?
03:20This is Joe Mead, the state's first ever financial services ombudsman.
03:26My guiding principle as ombudsman was,
03:29if there was a product you had sold or a decision you had made,
03:32and if you said, would I be happy if my elderly father or mother were treated this way?
03:38If you were happy, fine.
03:40If you weren't happy, you should look at that decision again.
03:43And a bit of common sense was far more important.
03:50As far back as 2009, and shortly before he retired,
03:54he ruled in favour of a tracker mortgage customer.
03:58He is speaking publicly about this for the first time.
04:02I felt that this could be a potential red flag for future cases.
04:08And that was why I felt that it was appropriate to refer the matter to the financial regulator.
04:14But I felt, on the basis of that one case,
04:17that there could be similar cases of a similar nature in many of the institutions.
04:23But there are limits to his powers as ombudsman.
04:27He could only make a referral to the regulator,
04:30which at the time was under the auspices of the central bank.
04:34To this day, Joe Mead says he has no idea if his words were really listened to at the time.
04:46How the financial regulator acted on my recommendation was a matter for the financial regulator.
04:53But it was a big problem.
04:57And the financial ombudsman had highlighted what could be a problem in 2009.
05:03Charlie Weston was the journalist who broke the story of Joe Mead's landmark decision.
05:11I thought it was usually significant that a statutory officer has spotted something that he thinks needs investigating,
05:17and asked the central bank to look at it.
05:19And I thought there might be more cases out there.
05:25When I broke the story, there was no reaction.
05:28And it just seemed to fade away.
05:30But I just had a feeling there was something in it.
05:32They're trying to take these mortgages off them.
05:34You know, the must-have item, the tracker.
05:36I mean, I came up with the phrase, you'd be crackers, because they were such good value,
05:40to try and convince people to stay on the trackers.
05:44So, I immediately realised, oh, hold on, there's something wrong here.
05:48You're constantly telling the central bank, look, this is much bigger than you guys seem to appreciate.
05:53And you're probably being the small armist, you know.
05:55But I could see, I was getting so many emails from people.
05:59For Thomas Ryan and his wife,
06:06investigation into all banks in 2016 is bittersweet.
06:11The Wexford couple had previously taken their bank, PTSB,
06:15all the way to the High Court and won,
06:18leading to a ruling that their case should be reviewed again by the OMB.
06:22By 2017, the Ryans' issues with permanent TSB have still not been resolved.
06:33While driving his car one day, Thomas receives a call out of the blue at Kassan.
06:38He just said to me that they were going to bring some people up before the Oireachtas,
06:41because he felt it would be a game changer.
06:44By this stage, the Ryans had been offered compensation by the bank for taking their own offer
06:49and planned to appeal to the Ombudsman.
06:52They'd also been given their trackers back by PTSB.
06:56But even then, their new tracker rate was much higher than they had expected.
07:01The redressing had already happened, but we weren't happy with it.
07:04They were charging this hugely inflated rate all along.
07:07So it was kind of in a limbo situation as such.
07:10It just didn't seem to be coming to a fair finish at all.
07:13These mortgage holders came to Leinster House today publicly.
07:17I knew how important I was going to be.
07:20And if I did it right, it was going to have an effect.
07:23If I did it wrong, I would have been the loudmouth in it for the attention
07:27and all the other things that were being said about me in the banks.
07:29I applaud each and every one of you for being so brave to come here in the face of the banks.
07:36John McGuinness TD, currently the last Count Corlea of the Dáil.
07:40And previously I was chairman of the Finance Committee.
07:46In his role as chair of the influential Orachtas Finance Committee,
07:50John McGuinness had already invited the Central Bank in to talk about the tracker mortgage scandal.
07:55Just to be clear what we're looking for is only what's in the public domain of your engagement with the institutions...
08:04The committee was hoping to establish what progress was being made in the Central Bank's investigation.
08:09We're going to adjourn the meeting. And we want those figures when we come back. So ten minutes.
08:17By October 2017, almost two years after the investigation had been launched, McGuinness and his fellow committee members are unhappy.
08:26My belief was listening to the Central Bank and to the other players involved,
08:32that the Central Bank did not want to do a full-scale investigation to the extent that the members of the Finance Committee would have liked.
08:42They were urgent to take on the banks for whatever reason. And the banks were hunted.
08:51They were bullying the Central Bank, in my opinion, to prevent a full-scale investigation.
08:59Pari Kassan, he had far more information for us about each of the banks, about how their customers were impacted.
09:09And indeed, he had a ballpark figure in each bank as to how many were affected.
09:15So he was much more informative about customers than the Central Bank.
09:21My family have suffered enormously due to the stress caused.
09:25I myself suffered a stroke in 2013 with lasting consequences to my life, family and breakdown in 2015, losing her ability to speak.
09:33I was watching back home and, you know, I'm just so proud of them all.
09:37There was total shock amongst members. They were abandoned, basically. Abandoned by the state. Abandoned by their banks.
09:49I think that altered everything. So we came out, all the cameras started going off together and I went, oh my god.
09:59The headlines this Thursday lunchtime.
10:03On the day when I was coming home and I had the radio on. And it was the headline on the news.
10:07And today of those customers...
10:08...sappearance prompted a public outcry and the government soon intervened.
10:13What we want to see is action from the banks. And if we don't see action from the banks, then there will be action from the government.
10:18By the end of the month, Minister for Finance Pascal Dunahoo was summoning the CEOs of Bank of Ireland, AIB and the other major banks involved to meet with him and demanding action.
10:30Francesca, what's going to be your message for the minister today?
10:33Shame on you! Shame on you!
10:35We have apologised several times before and we apologise again.
10:38We've apologised unequivocally.
10:40On the 13th of June 2018, almost seven years after their High Court victory, the Ryans finally settled their tracker case with permanent TSB.
10:52Kisan and a mediator are present when the bank agrees to pay them an additional 85,000 euro in full.
10:59As part of the agreement, they're asked to withdraw their complaint to the Ombudsman.
11:05But there is another aspect of the agreement that worries the Ryans, even today.
11:11We were approached by PTSB to do a mediated settlement and then we were told that we had to sign an agreement not to talk about the money they had taken from us and the circumstances around that.
11:23We had to sign an agreement to say we wouldn't discuss that, which is a farce.
11:26We talked long and hard about whether this was the right thing to do.
11:32But at the end of the day...
11:34Yeah, it's important for other people to know.
11:36It is important. It is important for people to know and just see the truth.
11:41You don't expect a so-called trusted institution as a bank to treat you the way they do.
11:46But I mean, there's many people like us. It destroyed us.
11:56As the central bank's investigation progresses, by early 2017, thousands of individuals and families start to get letters from their banks, telling them they were wrongly taken off their tracker mortgage.
12:08Their own banks, and in some cases, the independent ombudsman had previously told them that they were not entitled to their tracker back.
12:17Those affected are typically put back on the correct tracker immediately.
12:22Then they're offered a refund of the money they were overcharged for years.
12:27Finally, they're offered compensation for the impact the overcharging has had on their lives.
12:33But under the central bank's guidelines, the amount of compensation on offer is left to the discretion of the banks themselves.
12:44When people then, in families particularly, are overcharged, and they come to you, the redress check, they'd open it, and they'd obviously be clear, exciting.
12:52But that lasted, in the main, about a half a minute.
12:56And then anger came in. And that anger was massive.
13:01The what-if questions began.
13:04It takes a while for them to realise that it was spread over six years, seven years, eight years, and it's a monthly amount that somebody's taking.
13:12When I saw kids impacted, and what had occurred with them, as a father of five, that would really have resonated with me.
13:21And I'd get angry. I would even get emotional when I'd look at some cases and I'd go, who the F did you think you were?
13:30Despite the best efforts of people like Padraic Cassan to influence the scope of its investigation, not everyone is included when the banks first report their tracker numbers to the central bank.
13:48So, on Ask About Money, people started raising the question, saying, should I have been offered a tracker?
13:55Brendan Burgess is a consumer advocate who founded the Ask About Money website over 25 years ago.
14:03For years, he has been watching as the tracker issue comes up time and again on the website's discussion boards.
14:10One example in particular involving customers of state-owned AIB catches his eye.
14:17Customers of AIB took out mortgages with fixed-rate contracts.
14:22So, what that said was that for the first three years, your interest rate will be fixed.
14:28And after that, we will offer you a suite of mortgage rates, including a tracker mortgage at the then prevailing rate.
14:38But AIB argued, we don't offer trackers anymore, so we don't have a prevailing rate, so we can't offer you a tracker.
14:48That was a bizarre argument.
14:50Convinced that AIB should be restoring these people to the correct tracker rate, in early 2019, Brendan invites a small group of Ask About Money discussion board users to his house.
15:05We initially had a meeting around my kitchen table, and we proceeded with our meeting.
15:12Dunshockland native Alan Kenny is one of those who attends.
15:17He had spent years on his own trying to convince AIB to give him his tracker back.
15:23It's in the contracts, but you're almost thinking then, if everybody is saying something, then maybe you're the one that's wrong or whatever.
15:32What can you do?
15:35A phone call could take hours.
15:38By the time you ring someone, tell them the scenario, blah, blah, blah, get cut off, ring back in, speaking to somebody else, and whatnot.
15:44I started to think there's something not right here.
15:48Alan called himself Never Ever.
15:51That was his username because he was saying never ever giving up against AIB until it's resolved.
15:58By early 2019, AIB has acknowledged that thousands of its own customers could be affected by the prevailing rate tracker issue due to what it calls a service failure.
16:09It offers them 1,615 euro each in compensation.
16:16Convinced that AIB should be offering these people more compensation and the correct tracker rate, Brendan and his new kitchen cabinet devise a strategy to fight back.
16:27AIB has the right to set their mortgage rate and the margin on a tracker at the then prevailing rate.
16:35They can set the rates at whatever rate they choose.
16:38But what they can't do is set the prevailing rate three years later or five years later.
16:46They can't set it retrospectively.
16:48And that's what AIB tried to do.
16:50And that just did not wash.
16:52The directors will be joining you.
16:54Alan accompanies Brendan to AIB's shareholder meetings in order to put pressure on the bank's leadership.
17:00Not once did I hear the tracker morgue scandal mentioned.
17:05I'm not someone who's waking up, I'm going to see what AGMs I can go to poke some hard questions or whatever.
17:11But doing it, there is a bit of excitement and it's going up to anybody you don't know.
17:16That was part of a strategy.
17:18But AIB is refusing to budge on its initial offer.
17:22Brendan and his kitchen cabinet decide to give it one last go.
17:26Brendan helps another member to reignite her case with the Ombudsman, which is yet to be decided upon.
17:33He knows that this sample case, if successful, will set an important precedent.
17:39Under new central bank rules, AIB will have to give all 6,000 affected cost far more compensation.
17:47And then one morning the letter arrived from the Ombudsman and the last line was, we uphold the complaint.
17:56So I was absolutely delighted and I immediately rang the borrower and told her and she started crying.
18:04AIB has made a provision of 300 million euro in its accounts for last year to cover the potential future liabilities.
18:11They announced that they were making a provision of 300 million for losses arising from compensation they'd have to pay out.
18:20I was delighted, you know.
18:24The nature of consumer campaigning is when you take a case and will never have heard of you.
18:32A lot of people who got their trackers back did not realise it was by the work of campaigners and journalists, people hounding the tuition.
18:41Another example of that is the work that has done for Bank of Ireland customers.
18:46Most banks actually can't concession in Dublin and now we're being hunted for the family home.
18:56In the autumn of 2017, with an eviction date looming, the couple reluctantly moved to a rental property in the area.
19:04We were lying to the children to say that we were going to try living in another in six years' time.
19:11I lived through all of this as Bank of Ireland staff.
19:15The reason they gave for selling our mortgage is that we're deemed to be non-performing.
19:22When the bank are overcharging us, which they've been found at fault for,
19:27I feel we'd be justified in asking and would be revisited.
19:39The central bank's investigation found that over 40,000 accounts owned by punters who knew exactly what a tracker mortgage was,
19:49were wrongly taken off trackers.
19:52Just over one in ten went on to pursue an appeal.
20:02I'm not convinced that the panels worked very well.
20:04I think they were probably overly adversarial.
20:07They just weren't consistent.
20:08There was a different panel for every bank.
20:10Maybe there should have been just one panel.
20:12That might have been a better idea.
20:15You want to be quite capable.
20:17You want to be very confident to go and take your case to a panel.
20:21At the height of their tracker battle, Balbriggan couple, Katrina and John Redmond,
20:30were forced to grow their own food and feed their family of five on a weekly budget of just 70 euro.
20:37Despite being included in the tracker mortgage examination, they were deeply unhappy with the amount of compensation on offer from Ulster Bank.
20:50They decided to represent themselves at an oral appeal hearing.
20:56The appeals panel wanted us to tell them the value of our losses and the value of what we had suffered.
21:05How do you do that?
21:06How do you put a value on not having another child?
21:09How do you put a value on not...
21:11The mental stress.
21:13Yeah, like, how do you put a value on the mental stress?
21:16This is where I came to escape the pressure of it.
21:22We were coming in to an appeals panel because they'd given us 1,500 euro compensation, which was a joke.
21:31I know 1,500 euro was still a lot of money, but it was a joke in what they did.
21:37I'll just keep going.
21:39At one stage I felt I was in a principal's office. I felt like I was being grilled.
21:46We left the appeals panel and we were very uncomfortable straight away.
21:50And we felt unheard and we felt uncomfortable with what had happened.
21:58In July 2019, they win their appeal and are told they are entitled to 15,000 euro more compensation
22:06than Ulster Bank had originally offered them.
22:09But on a point of principle, they refused the amount on offer and appealed their case to the Ombudsman.
22:16It was about being acknowledged for what we had gone through.
22:19And we didn't get that from Ulster Bank and we didn't get that from the appeals panel.
22:25It took just under four years for us to get a decision from the Ombudsman.
22:31The Ombudsman awarded us 20,000 euro compensation.
22:38And the Ombudsman did say that the bank was wrong.
22:42Is it enough for the pain and heartache? No.
22:48Is it what we got? Yeah, that's great.
22:51That was the end of it. We were finished with Ulster Bank.
22:54I think if we got one more euro over the 15,000, it was enough.
23:09We decided to take the appeal for compensation, which we thought we were rightly due
23:15because of what they'd done to us.
23:17Sonia and Michael Grace bought their family home in Cavan in 2006
23:22and went on to take out a mortgage through KBC Bank.
23:27After fixing for three years, in 2011 they complained to the bank
23:31when they were not offered to track our mortgage.
23:34But the bank refused.
23:37As an example, the first four months when the tracker rate wasn't given to us.
23:42If we'd had our tracker, we would have had an extra 600 per month in our pocket.
23:49We wouldn't have had to choose between fuel, food and coal.
23:56Our life ended up spiralling after that, unfortunately downhill.
24:01By this stage, Michael was unemployed after losing his job in a quarry.
24:07Sonia had also availed of a voluntary redundancy scheme in her workplace
24:12in the expectation that when their tracker was returned to them,
24:16it would reduce their repayments.
24:18As their financial situation worsens, the couple engage with the bank
24:23and seek to cut costs where they can.
24:26I used to dread to see the post-bomb coming in.
24:30It kind of snowballs then, we always pay.
24:34We never miss the payment or that, like, so...
24:37Eventually, KBC asked them to give up their family home.
24:42So, three times they asked it.
24:4499 customers lost their homes...
24:46By the time it concluded in July 2019,
24:48the Central Bank examination had identified 11 financial institutions...
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