11:57 AM, 30th March 2013, About 11 years ago 9
Martin Wheatley the current head of conduct at the Financial Services Authority (FSA) has been strongly criticised by the Treasury Select Committee (TSC) for the FSA’s response to the Bank of Ireland differential increase for thousands of it’s tracker rate customers.
In a letter by Andrew Tyrie MP (chairman of the TSC) Mr Wheatley was accused of “not addressing the main issues”.
He went on to say “Your response does not tell the Committee whether you were concerned at the action of the Bank of Ireland, what assessment you have made of the impact its decision might be on the rest of the industry, nor how the FCA would act in the event of lenders taking this sort of action in the future,”
In the FSA’s first response to the TSC Mr Wheatley had said the FSA did not plan to take any action against Bank of Ireland over its rate hike that hit 13,500 customers with higher mortgage repayment costs despite no change in under-lying interest rates.
“As these mortgages fall outside of our regulatory remit we do not plan to take further action in respect of the increase to the differential (the difference between base rates and the additional interest charged by the bank). We have reviewed the terms and conditions provided to us by the Bank of Ireland UK and did not identify any concerns which led us to believe the terms may be unfair,”
From next month Mr Wheatley is due to take charge of the FCA, which will be responsible for the regulation of all issues surrounding financial conduct in the UK and this distraction could be the cause for such little time being taken for the consideration of consumers in his first response.
Surprisingly considering what has happened so far, the FSA promised in 2008 to police tracker mortgage rates, saying “tracker interest rate floors need to be clear and unambiguous to the consumer and consistently and prominently spelt out in the lender’s documentation. If it is not, you run the real risk of both breaching our disclosure requirements and having an unfair contract term you can’t enforce”
Unsurprisingly it has been reported that this month the Bank of Ireland chief executive Richie Boucher had been awarded his first pay rise to just over €840,000 (£700,000), a €12,000 increase, despite losses of more than €2bn at the lender.
Mark Alexander said “Property118 will be taking legal advice from Justin Selig of The Law Department on Tuesday next on whether we should instruct barristers to proceed now with a class action, or await the second response from the FSA to the Treasury Select Committee letter from Andrew Tyrie. Justin Selig has kindly sent me copies of the FSA response and the subsequent letter to the FSA from Martin Wheatley MP. I have to say, the questions in the second letter are far stronger and more direct than the first. It seems quite clear to me that Mr Tyrie believes the BoI contract terms to be unfair and he’s looking for the FSA to agree the same. The FSA response will be very interesting indeed.”
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