Irish banks engaged in a “reign of terror” in moving customers off tracker mortgages, denying them their right to appeal, and causing them to go into arrears, new evidence to the Oireachtas Finance Committee reveals.
In written personal testimony to the committee witnesses, including whistleblowers from within the banking sector, detail “underhand tactics” on mortgages as outlining the untold hurt and damage caused to people in the name of profit.
In one statement, given by Kilkenny man Tony Lawlor, the committee is told that Bank of Ireland sought to deny the basis of the original mortgage contract in pursuit of increased interest payments.
He claimed the bank relied on redacted documents, withheld relevant documents, ‘misrepresented’ the terms of the original contract, and produced a mortgage deed that triggered a civil procedure to possess his family home.
Mr Lawlor said the bank "unilaterally and fundamentally without consent of any description changed his mortgage contract” applied a higher rate of interest above the prevailing ECB as set out in the contract.
As a result, ECB rates were no longer adopted and applied to his mortgage contract.
“This totally changed my life,” Mr Lawlor told the committee.
The immediate impact of this was that it generated arrears for the first time in my life on my mortgage pushing me into me an unnecessary default.
"The impact on me personally during this reign of terror where the bank defended the indefensible, delayed the inevitable, and denied the obvious, is akin to living a hell on earth to me.
"You stare financial ruin directly in the face and live with the real and present risk of homelessness destroying you as a person with the dreaded visit from a sheriff or private security firm to evict you from your family home,” Mr Lawlor told the Committee.
Mr Lawlor said his health suffered significantly as a result.
“Over the time period involved with dealing with the bank, my health deteriorated very significantly. I suffered two heart attacks, was fitted with cardiac stents, and finally subjected to a quintuple coronary artery bypass graft in 2014.
"I was left with no other option but to retire from my very well-paid job with the National Ambulance Service, a job I loved,” he said.
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Another witness Shane Kavanagh who worked as ‘freelance’ agent for the Educational Building Society (EBS) voiced concerns about accounting and other irregularities.
A former EBS director confirmed Mr Kavanagh’s concerns.
In his evidence, Mr Kavanagh referenced a separate case taken by another agent to prevent termination. This other agent claimed they were terminated because they resisted pressure from EBS to adopt underhand sales tactics for investment products, the committee was told in evidence.
During litigation, the High Court ruled against the EBS and noted the agent was being told ‘move along there is nothing to see here’.
Mr Kavanagh said sadly, whistleblowers are often seen as conspiracy theorists, troublemakers, and a threat.
They are exposed to bullying and retaliation, leading to financial insecurity and stress.
Responding to the testimony, Finance Committee chairman John McGuiness told the
that the issues that have dogged the banking sector must be resolved.
“The statements given by the witnesses to the committee clearly demonstrate the unwillingness of the sector to act in an honourable and transparent manner," Mr McGuinness said.
"This cannot continue. The people of this country deserve better.
"People should not have to publicly open up the details of their personal lives to draw attention to injustices and to achieve resolution,” he said.
The committee has been holding extensive hearings into the tracker mortgage scandal and has had extensive engagement with all of the main banks as to their actions.
Bank of Ireland has written to approximately 4,300 affected customers with an offer of compensation following discussions with the Central Bank.
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