Tuesday night's RTE "Prime Time" programme made for shocking viewing. It exposed the scandal of banks denying mortgage customers their contractual right to return to a tracker rate following a period of time on a fixed or variable rate. Customers have been forced to go through the banks' own internal appeal systems, the Financial Services Ombudsman, the Central Bank, and the courts system to vindicate their rights. If they finally win the argument to be returned to a tracker rate, many of them are not being given the original tracker rate but a much inflated one which is sometimes between 3% and 4% higher than the original tracker rate.
As the Tánaiste knows, the only variable element of a tracker mortgage rate is the ECB base rate. The margin should remain constant. "Prime Time" featured a customer who successfully fought Permanent TSB all the way to the High Court. He has now been given what can only be described as a ridiculous tracker rate costing him hundreds of euro extra each month in additional interest payments. In that case alone, Permanent TSB stands accused of failing to honour the terms of the original tracker mortgage contract by significantly hiking the margin it charges, quoting the customer a margin of up to 3.35% instead of the original 1.1% above the ECB rate. This cannot be dismissed as a legacy issue from another era because it is happening here and now. Indeed, it is not an isolated case.
Very serious issues were also raised in the "Prime Time" programme concerning practices at AIB and Bank of Ireland. One AIB customer whose case was profiled was eventually, after a battle, returned to a tracker rate with a margin of just under 4%. We already know that up to 300,000 variable rate mortgage customers are being ripped off by their banks. We now know that many tracker customers are being denied the right to return to a rate to which they are contractually entitled. We have known for some time that in some cases banks are determined to do whatever it takes to get people off tracker mortgage rates.