General Overview

On 7 August 2020, the Financial Services and Pension Ombudsman (FSPO) published volume 4 of its Digest of Legally Binding Decisions; this included 22 decisions which were issued between January 2020 and May 2020.

The decisions can be summarised as follows:

  • Eight decisions related to tracker mortgage interest rate complaints, five of which were not upheld and three of which were upheld.
  • Six decisions related to a wide variety of banking issues, including:
    • the application of interest and surcharge interest
    • account closure
    • access to a vulnerable person's bank account.

Of these six decisions, two were not upheld and the remaining four were upheld to some degree (either partially, substantially or in full).

  • Five insurance related decisions, two were not upheld and the remaining three were upheld to some degree (partially, substantially or in full).
  • One investment related decision regarding a decrease in value following the Brexit referendum that was not upheld.
  • Two case studies of decisions in pension related complaints. One complaint related to Chargeable Excess Tax which was upheld and another complaint related to the application of tax class, which was partially upheld.

In his commentary, the FSPO emphasised that "the key message is that providers should ensure that their conduct is fair, reasonable and proportionate." The FSPO also referred to what was described as "a recurring issue" across the financial service related complaints received by the FSPO, which related to the incorrect reporting of customer credit records to the Irish Credit Bureau and the Central Credit Register.

The FSPO emphasised that financial service providers should ensure all reporting is correct and that any errors are rectified without delay given the potential adverse impact an incorrect record could have on an individual's ability to obtain credit.

More generally, the FSPO noted that it has received over 200 complaints related to COVID-19 across a broad range of issues including credit and travel, event and business interruption insurance. The FSPO has put measures in place to expedite these complaints, where appropriate.

Tracker mortgage rate complaints upheld

The three complaints which were fully upheld relate to mortgage accounts deemed impacted as part of the Tracker Mortgage Examination.

In one complaint, the FSPO had found in favour of the customer as to the customer's contractual entitlement to a tracker interest rate. In the two remaining upheld complaints, the FSPO found that, having regard to all of the evidence and in particular, the personal impact caused by the overcharging on the mortgage accounts, the level of compensation was not sufficient or reasonable. In both instances, the FSPO directed that an additional sum was to be paid to the customers.

Tracker mortgage rate complaints not upheld

The FSPO has highlighted that, while the volume of tracker mortgage related complaints continues to be high, a considerable number of these complaints relate to individuals who "would like to have received tracker mortgages, but who have no contractual or other entitlement to a tracker mortgage". This trend is evident from a number of decisions which were not upheld including:

  • complaints based on a perceived understanding or belief from a customer that they were entitled to a tracker interest rate rather than by reference to the contractual documentation.
  • complaints based on a customer's expectation that the term 'variable rate' should also relate to a tracker interest rate when there was no reference in the contractual documentation to the variable rate varying in accordance with ECB rate.

As expected, the analysis of the contractual documentation continues to be key for the FSPO when considering and determining the outcome of these complaints. Providers should take some comfort that clearly documented contractual terms ought to continue to be a basis for the dismissal of overly optimistic claims.