PTSB executive did not want to take ownership of tracker issue, inquiry told 

The matter first came 'unusually' to the marketing department to coordinate

The Central Bank contends that PTSB treated customers who did not complain about the tracker rate unfairly in breach of the Consumer Protection Code 2006. Picture: Leah Farrell/Rollingnews.ie

Nobody on the PTSB executive committee wanted to take responsibility for the tracker mortgage issue when it first arose in January 2009. Instead it defaulted back to the marketing department to coordinate a response, the bank’s former marketing chief has told an inquiry.

The second day of the Central Bank’s inquiry saw the former marketing manager for PTSB Niall O’Grady testify. 

Mr O’Grady was one of the top people in the bank who oversaw the initial response to the issue when it first arose.

The inquiry is looking into whether former PTSB chief executive David Guinane participated in the commission of a regulatory breach by PTSB during the period January 19, 2009 to April 2010.

The inquiry is focused on PTSB customers who had been on a tracker mortgage with the bank but elected to go on a fixed rate. As this fixed rate was expiring, some customers wanted to go back on their tracker mortgage which they would have been entitled to under their loan agreement.

However, for some customers, the original tracker mortgage would have been a lower rate than the one that PTSB offered at the time but only customers who contacted the bank were put back on their original rate.

The Central Bank contends that PTSB treated customers who did not complain about the tracker rate unfairly in breach of the Consumer Protection Code 2006.

During his testimony, Mr O’Grady distanced himself from the eventual policy saying his role was in coordinating subject matter experts, getting their input and moving it through the organisation as appropriate.

Mr O’Grady said that this “unusually” came to them in the marketing department. It started with a single customer query, through their mortgage broker, as they sought to get back on their lower original tracker rate.

On January 12, 2009, a meeting was convened with various departments within the bank which Mr O’Grady did not attend. 

From this meeting, a proposal on how to deal with this issue — which had been raised by just one customer at the time — had been drafted.

The next day, Mr O’Grady took the proposal to the executive committee of the bank to see “if anybody around the table was either aware of it or could give input into it or could resolve it or take ownership of it”.

Mr O’Grady said he either wanted someone on the committee to either “own it” or “give perspective on it”.

“There was nobody putting their hand up to take it.” A couple of days later on January 16, 2009, Mr O’Grady sent an email to Mr Guinane summarising the issue and the proposed solution.

In the email he wrote that the tracker rate customers would be entitled to — the original rate or the current rate — was “ambiguous” so the bank has “the option of making whichever we choose available to them”.

“I propose we allow customers who actually contact, to revert to their original tracker,” Mr O’Grady wrote.

When Mr O’Grady contacted Mr Guinane a few days later to get his approval on the plan, Mr Guinane responded “OK with that”.

Mr Guinane served as chief executive of PTSB between 2007 and 2012 and is now the first individual to be put before a public inquiry as part of the Central Bank’s investigation into the tracker mortgage scandal.

He denies that he participated in the prescribed contravention of the consumer code.