Dáil Éireann Debate, Thursday - 30 March 2017
140. Deputy Michael McGrath asked the Minister for Finance the methodologies used by each lender under the Central Bank's tracker mortgage examination to arrive at a redress rate of interest and compensation; the way in which the Central Bank determines such methodologies to be appropriate; and if he will make a statement on the matter. [15967/17]
View answerIt is important to note that the Central Bank does not have the statutory power to compel lenders to implement redress and compensation programmes in respect of failures that occurred prior to the introduction of the Central Bank (Supervision and Enforcement) Act 2013. However, where customer detriment is identified, the Central Bank has advised that it has clearly articulated its expectations of lenders to provide appropriate redress and compensation to impacted customers in line with prescribed Principles for Redress.
Key elements of the Central Bank's expectations in respect of redress and compensation for impacted customers include:
- any harm is stopped at the earliest possible time after each group of impacted customers is identified;
- the interest rates applied to impacted customers' accounts revert to the appropriate tracker interest rate or impacted customers are given the opportunity to revert to such a rate where relevant;
- redress will be provided to impacted customers to return them to the position they would have been in had lenders' failures not occurred;
- reasonable compensation, that reflects the detriment suffered by individual customers, is provided;
- redress and compensation is to be paid to impacted customers up front at the point of offer and compensation cannot be reduced by virtue of a customer lodging an appeal;
- an additional payment is to be provided to impacted customers at the point of offer to enable them to take independent professional advice regarding the redress and compensation offers made to them;
- an independent appeals process is to be established to address complaints from customers who are dissatisfied with any aspect of the redress and compensation package that they receive from lenders; and
- lenders will undertake not to raise any time limit defences that may otherwise apply if impacted customers make complaints to the Financial Services Ombudsman (the "FSO") or initiate proceedings before the courts.
The Principles for Redress are designed to ensure that impacted customers receive appropriate redress and compensation in a timely manner. The appeals element of the Principles for Redress ensures that customers have an option to challenge any aspect of the redress and compensation package, which is additional to the options of bringing a complaint to the FSO or initiating court proceedings.
