Update on Examination of Tracker Mortgages

19 December 2016 Press Release
  • Most significant supervisory review undertaken in the context of Central Bank’s consumer protection mandate
  • Approximately 8,200 impacted accounts identified to date
  • Based on current progress we expect that relevant lenders will have identified and commenced engagement with impacted customers by mid-2017

The Central Bank works to ensure the fair treatment of consumers by financial services firms and has committed to providing updates on its Tracker Mortgage Examination. The Tracker Mortgage Examination is the most significant supervisory review that the Central Bank has undertaken in the context of our consumer protection mandate.

All lenders are progressing the Tracker Examination, however, each lender is at a different stage in the process (for example, due to the number of mortgage accounts, the nature of the systems and records they have maintained as well as the different issues which are arising during the review). To date, lenders have identified approximately 8,200 accounts where a right to, or the option of, a tracker rate of interest and/or the correct tracker rate of interest was not provided to customers in accordance with lenders’ contractual or regulatory requirements.

When groups of impacted customers are identified, in the first instance, the lender must stop charging the incorrect rate of interest on the customer’s account. The lender must then communicate this to the customer, to ensure that any further customer detriment is stopped as early as possible. Once a full review of the customer’s account is complete, following external independent third party assurance, the lender will then issue a letter to the customer explaining the nature of the error, the correct rate to apply to the customer’s account and information on the next steps in the Tracker Examination, including the redress and compensation process.

Bernard Sheridan, Director of Consumer Protection said: “I welcome the fact that these figures show an increase in the pace at which impacted customers are being identified, with more customers starting to be moved to the correct interest rate, and redress and compensation commencing. The Central Bank continues to challenge all lenders to ensure that they identify all impacted customers in a timely manner. As we have said previously, given the size and complexity of the Tracker Examination, it will take time to complete, with lenders at varying stages given the individual lender challenges this Tracker Examination poses. However, based on current progress we expect that relevant lenders will have identified and commenced engagement with impacted customers by mid-2017 with payment of redress and compensation, processing and consideration of any appeals and the Central Bank’s own assurance work continuing beyond this point for some lenders.”

The Examination framework also provides that lenders establish an independent appeals process to deal with customers who are dissatisfied with any aspect of the redress package that they receive from lenders in respect of these matters.

While we expect the lenders’ reviews to deliver fair outcomes for customers, the Central Bank believes that the appeals process is a very important part of the overall framework to ensure that there is an independent and transparent process in place, for any impacted customer who feels that their particular circumstances were not appropriately considered.

We expect to see more lenders engaging with impacted customers over the next few months.

The Central Bank continues to monitor lenders’ progress in respect of the conduct of the Tracker Examination through direct engagement with each lender and its appointed external independent party and through on-site reviews and review of regular progress reporting. Where necessary the Central Bank will take appropriate supervisory action, including enforcement action, to ensure that fair outcomes are achieved for consumers, as demonstrated in the outcome of a recent settlement agreement with Springboard Mortgages Limited where the Central Bank issued a reprimand and imposed a fine of €4.5m.

Further updates will be issued in 2017 as the Tracker Examination further progresses.


Since 2010, the Central Bank has identified and pursued issues in relation to transparency with specific lenders for borrowers who opted to switch from their tracker rates or who had the right to revert to a tracker rate at the end of the fixed rate period. However, as new issues continued to emerge, the Central Bank decided that a system-wide review was necessary, to ensure that all lenders are acting in their customers’ best interests.

The Central Bank wrote to fifteen lenders in December 2015 setting out the framework for carrying out the Tracker Examination. This covers all mortgage lenders who may have sold tracker mortgages in Ireland at any time in the past. It covers both banks and other regulated lenders, and includes lenders that are no longer selling mortgages. It also covers mortgages that have been redeemed or switched to another lender. The Tracker Examination requires all lenders to examine the extent to which they have been meeting their contractual obligations to their customers, their compliance with their obligations under relevant consumer protection focused regulations in their dealings with their consumers and that all communications with customers in respect of these matters disclosed material information in a manner which sought to inform them.

Due to the significance of the work for both lenders and their customers and the general public interest in the review, we have published regular updates on progress since last December. However, as this is an ongoing supervisory review of lenders’ practices, we are not in a position to discuss or comment on individual lenders.

As detailed in our previous updates, the initial phase of the Tracker Examination required lenders to put governance structures and systems in place to conduct a comprehensive examination. Lenders were required to appoint external independent third party assurers to oversee the Tracker Examination and to ensure that it is being carried out in line with the Central Bank’s Framework for the conduct of the Tracker Examination.

The second phase of the Tracker Examination is ongoing and involves extensive internal reviews of lenders’ mortgage books to identify customers who fall within the scope of the Tracker Examination, if any. Given the length of time over which tracker mortgages were offered to customers, over two million mortgage accounts had to be initially reviewed by lenders to identify the accounts in-scope for the Tracker Examination. A further review is then required to identify those customers who have been impacted by a lender’s failure to adhere to or honour the customer’s contractual entitlements, or comply with the regulatory requirements regarding disclosure and transparency of information.

Read previous updates for 27 July 2016 and 27 April 2016.

The fifteen lenders written to in December 2015 are as follows:

  • AIB Group (Allied Irish Banks plc, AIB Mortgage Bank, EBS Limited, EBS Mortgage Bank and Haven Mortgage Limited)
  • Bank of Ireland Group (The Governor and Company of the Bank of Ireland and Bank of Ireland Mortgage Bank)
  • Permanent tsb plc
  • Ulster Bank DAC Limited
  • KBC Bank Ireland plc
  • ACC Loan Management Limited
  • Bank of Scotland Plc
  • Danske Bank
  • Dilosk Limited
  • Irish Bank Resolution Corporation Limited
  • Leeds Building Society
  • Pepper Asset Servicing
  • Springboard Mortgage Limited
  • Start Mortgages Limited T/A Start Mortgages
  • Stepstone Mortgage Funding Limited

It should be noted that sold mortgage books are the responsibility of the mortgage originator, in the first instance, when carrying out the Tracker Examination to identify any impacted customers prior to the sale of its loan book.