The Financial Regulator has voiced ‘concerns’ over the manner in which disclosure and transparency are enacted when people move from a tracker rate onto any other rate in a press release yesterday.
There were no firm figures given, and no direct accusations (although the Financial Services Ombudsman has received c. 60 complaints). The release comes on the back of a story in the Sunday Business Post by Emma Kennedy which outlined that PTsb ‘misclassified’ up to 300 mortgages and put them on standard variable rates rather than trackers. The issue was spotted by PTsb and rectified by them, customers have been refunded (on average €5,000) the difference they paid plus interest.
The way in which people ‘come off’ trackers tends to be by their own volition, if they opted for a fixed rate while on a tracker contract they do not need to be re-offered their tracker rate at the end. If they were on a fixed rate and are coming off it they are given a selection of rates and although the tracker was offered in the contract, a lender might put several other rates on the same page and give the client the choice of ticking a box to decide which one they’d like to proceed with.
The guidelines issued yesterday will direct banks to give indicative comparisons of the monthly costs of each rate that may be on offer as well as an outline of the implications of moving away from a tracker rate, as well as details outlining the advantages of a tracker rate.
One lender had given a ‘cooling off period’ to people wishing to change rate from a tracker and the Regulator has determined that this may be put into the updated Consumer Protection Code.