KBC moves to clarify position on tracker mortgage time limits

KBC has moved to clarify that it has no intention of challenging complaints connected with tracker mortgage issues made to the financial watchdog that fall outside prescribed time limits.

The bank issued a statement on Monday morning, noting that it wouldn’t challenge complaints made outside a six-year time limit and has advised the Financial Services and Pensions Ombudsman (FSPO) of its position.

Its clarification follows a non-committal statement it issued last week to media outlets in which it said it was determined to “secure the best outcomes for all customers impacted by the tracker examination”.

According to a report in the Sunday Business Post, other banks including AIB, Bank of Ireland, Ulster Bank and Permanent TSB confirmed they wouldn't contest complaints made outside the time limit.

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Their comments came after Ger Deering, the Financial Services Ombudsman, raised concerns that some banks were contesting his office’s move to investigate tracker complaints, arguing that those complaints fall outside a six year time limit.

Speaking to RTÉ last week, Mr Deering said he is currently dealing with 1,141 complaints related to tracker mortgages. Of those, 103 were being assessed with regard to whether or not they fall outside the statutory time limit, but he said he expects that number to increase.

The Republic's tracker mortgage scandal, now stretching back more than a decade, ultimately affected 40,100 customers and resulted in the loss of 315 homes and buy-to-let properties through repossessions and voluntary surrenders, the Central Bank said in its final report on the matter in July.

A total of €683 million in refunds and compensation have been paid out by mortgage lenders to borrowers who were either denied their right to cheap mortgages linked to the European Central Bank’s (ECB) main rate or put on the wrong rate entirely.

Challenging

KBC was in the minority in the immediate aftermath of Ger Deering’s letter being reported upon by failing to say whether or not it was challenging, or had challenged, complaints made outside the time limits.

Fianna Fáil finance spokesman Michael McGrath called on Saturday for all banks to make a public commitment to no longer make an objection based on time limits.

“We already know that at least 500 cases currently before the ombudsman may have to be dismissed because of objections from banks under the time limit rule. The truth is the number of customers affected could be much higher as more and more tracker-related complaints are coming in all the time.

"On my suggestion, the Oireachtas Finance Committee issued a letter to all lenders in recent days asking them to clarify their approach and also making it clear to them the committee believes that the ombudsman should be allowed to consider all complaints relating to the tracker mortgage without time limit objections from banks," he said.

The country’s six main mortgage providers - AIB and its EBS subsidiary, Bank of Ireland, Ulster Bank, Permanent TSB and KBC Bank Ireland - have set aside €1.1 billion of provisions to date to cover redress and compensation, expected regulatory fines, and other costs linked to the State’s biggest financial overcharging fiasco.

The six lenders make up 98 per cent of all impacted customers in the State.

Justice John Hedigan, chairman of the Irish Banking Culture Board, welcomed the decision by each of the board’s member institutions to waive the time limit. “There is a significant journey to be undertaken in the restoration of public trust in the banking sector. Each action taken that seeks to prioritise fair outcomes for customers is another step on that journey,” he said.