A couple who claimed they were sold an unsuitable mortgage in 2007 have won a High Court challenge over the financial watchdog’s refusal to investigate a complaint about a bank.
Joseph and Ann Baynes from Dundrum in Dublin got a €150,000 loan from IIB Homeloans, later rebranded as KBC Homeloans, towards the purchase of two apartments in Portugal just before the economic crash in 2007. They had used their unencumbered home in Dundrum as security for the loan.
Mr Baynes was 62 and unemployed in 2007 while his wife was 57 and earned €2,000.
It was claimed that it was clear at the time the couple would be in their 70s and some years past retirement age by the time the 13-year mortgage had to be repaid.
They planned to get additional credit in Portugal to buy the apartments but failed to do so and they had used the IIB loan to pay towards the deposits on the properties.
When they failed to get the additional credit, they lost their deposits.
They got into financial difficulties in 2011 after Mrs Baynes became seriously ill and the loan was restructured, so they could stay in their home.
But pressure remained on them to sell their home by downsizing to meet their debt.
They say they only learned in 2019 that they had been mis-sold the loan after going to financial adviser Ben Hoey of Quartech, which helps people who have been mis-sold mortgages.
They lodged a complaint to the Financial Services and Pensions Ombudsman (FPSO) who found the complaint was not made within required time limits.
The FSPO also said they were aware of their own personal circumstances and, if they wished to complain, they ought to have reasonably known this as recently as 2011 when they got into financial difficulties and had to have the loan restructured.
The Baynes brought High Court proceedings seeking to have the decision overturned, and an investigation be carried out. It was claimed the FSPO had the power under the Financial Services and Pensions Ombudsman Act 2017 to consider the complaint or extend time for doing so.
The FSPO denied their claim and said the decision was correct in law.
In a judgment published this week, Mr Justice Cian Ferriter found that the FSPO was correct in rejecting the complaint on the basis that the Baynes ought to have been aware they had a right to complain as recently as 2011.
However, he found the FSPO was incorrect in not finding it would be just and equitable, as provided for in the 2017 Act, to extend time for making a complaint.
He said the FSPO’s decision that there was no evidence of reasonable grounds to make it just an equitable to extend time did not appear to demonstrate any engagement with the submission in fact made by the Baynes. No regard was had to the relevant consideration of that submission, the judge said.
He did not believe that, once the FPSO rejected the case on the basis that the Baynes should have known to complain much sooner, that there “was nothing left to expressly address” in relation to the extension of time application.