Competition watchdog accused of being afraid to fight ‘banking cartel’
THE State competition enforcement agency has been accused of being afraid to tackle banks on claims of cartel-like activity in denying people low-cost trackers.
The Oireachtas Finance Committee was told by various TDs that banks acted like a cartel in removing trackers from people.
But head of the Competition and Consumer Protection Commission (CCPC) Isolde Goggin said there was no evidence of cartel activity, and she rejected claims her agency had failed to protect consumers.
Committee chairman John McGuinness said most reasonable people had concluded that the fact all banks acted in the same way, at the same time, to remove trackers looked like the operation of an illegal cartel.
“Are you afraid of the banks? Are you afraid to take on the banks?,” he asked Ms Goggin.
“It stinks of a cartel. Your attitude is to loudly condemn the banks. But there is little real action to tackle the banks and support the interests of consumers.
“And I am very disappointed,” he said.
Ms Goggin said banks acted “unscrupulously” in pushing some customers off their tracker mortgage contracts, but there was no evidence of illegal cartel activity by them to deny consumers good-value tracker rates.
She called on anyone with information of cartel-like activity to bring it to the attention of the commission and “we will take the appropriate action”.
She told the committee that all banks started to withdraw trackers at the same time.
“But also they were losing their shirts on trackers at the same time. If banks intended to get people off trackers and that is what prompted their unscrupulous behaviour, then we need more evidence to ground a warrant to investigate it,” she said.
The Central Bank has a legal responsibility to hand over any evidence of criminal cartel behaviour to the CCPC, but there is no evidence at the moment.
Ms Goggin also said what was most concerning for the CCPC was “the apparent lack of a culture of compliance, which seems to be deeply ingrained in the financial industry”.
The State’s financial services ombudsman was called on to apologise to hundreds of mortgage holders who had complaints about trackers to the office rejected.
The committee was told that seven out of 10 tracker complaints were rejected by the ombudsman.
This was before the ombudsman’s office suspended decisions on trackers after the Central Bank put an industry-wide probe of tracker-loss cases in place.