Complainant

Respondent

Anonymised Parties

A Complainant

A Bank

Representatives

   Appeared in Person

Solicitor

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 21 Equal Status Act, 2000

CA-00032149-001

12/11/2019

On November 11, 2019, the complainant submitted a complaint of discrimination on Family grounds against the respondent Financial services company in relation to the provision for goods /services. The first incident of discrimination was mentioned as 16 May 2019 and the most recent incident as 4 November 2019. The ES1 Notification form was submitted on 26 June 2019.

The Claim is rejected in full by the Respondent.

The Complainant presented his case as a Lay Litigant and the Respondent was represented by a Legal Team.

The Complainant outlined the background to his having been as a long-standing customer of the respondent bank. He presented a copy of a fully completed ES1 form dated 24 June 2019.

In this he submitted that he had been treated unlawfully on family grounds during a phone conversation with an Agent of the bank on an undated day in May , 2019 .He wrote that he had been questioned during a discussion regarding proposals regarding a loan repayment on his partners child benefit and asked for documentary evidence in bank statements .He feared compulsory sale of land and attributed this to his changed family circumstances .

The complainant outlined a complex history of borrowing which commenced in 2010 and was renegotiated in 2016/2017. He had made repayments. One of the loans had been secured by a Government scheme and ought not to have been altered by the bank.

In 2013, he was assured by a local Bank Manager that working capital needed for the successful operation of his farm would not be affected by his taking out a loan for a business requirement. That loan has since been repaid. The complainant has two loans with the respondent. The Complainant submitted that in November 2019, the respondent transferred both loans to their “Retail Resolution Section and have since agreed the sale of both loans to a Vulture Fund “.

The complainant contended that his family circumstances changed in May 2018 and he observed a marked change in attitude towards him as a result. He gave details of his present family status. He attributed the selling of his loans to a Vulture Fund to have occurred as a direct consequence of his Family status.

The Complainant outlined that his Farm Accounts were due at the end of 2018. He and his partner had a personal bereavement of the loss of a child on January 12, 2019. His long-term Accountant had undertaken to sort out the Farm Accounts. He received threatening emails from the Bank regarding arrears. He had previously agreed the sale of a site for an agreed sum, subject to planning permission.

The complainant gave evidence that he received a phone call from an Agent of the Bank, Ms A who informed him that he would have to sell the farm. During that phone conversation and while discussing his statement of means, Ms A inquired as to what account the Child Benefit was paid into? The Complainant could not identify a linkage between his business affairs and child benefit. He referred to knowing of a case where the Judge found that it was not legitimate for child benefit to be taken into consideration. His Partner and her family were not financially dependent on him. He availed of Farm Assist.

The complainant submitted that this interaction had lacked respect. He had been refused permission to sell a site to purchase cows.

On 22 January 2019, he informed the Bank of his Family circumstances over Christmas 2018.? He did not recall if he had mentioned the death of his child.

By May 2019, he was experiencing pronounced financial difficulties which coupled with his personal family circumstances had caused him a delay in submitting his farm accounts. He had agreed to channel the income generated from a private sale to the respondent. This sale cannot now be released from the Vulture fund.

The complainant submitted documentation dated November 2019 from the respondent, which confirmed that one of two loans had been taken up by the Vulture fund.

On 9 January 2020, he confirmed that he had sent the ES1 form in compliance with section 21(2) of the Equal status Act.

He contended that he had been treated unfairly by the respondent if he continued to repay his loans he ought not to have been declared as having non-performing loans. His family circumstances are private and ought not to have been the banks concern. The change of attitude towards him coincided with the respondent’s awareness of his changed family situation.

During cross examination, he re-affirmed that he believed that his changed family status was really the only logical answer to his changed treatment by the Bank. He genuinely believed that the financial debt would be sorted as he had 11 years left on the loan. He deferred to the provisions of article 41 on the inalienable rights of the Family superior to Law.

The complainant did not have a named comparator.

He contended that his credit rating was shattered because of the Vulture Funds. He had prioritised the bank in repaying loans over other obligations. He submitted that he had vested authority in his Accountant to address the accounts on 30 January 2019. He approved this in writing on February 4, 2019.The complainant confirmed that he had honoured his commitments regarding loan B. He also has a part-built house prepared for sale “at this point in time, it would appear to me to be counterproductive for the respondent to sell any of my loans at a discount to a vulture fund at a discount reported to be in the region of 20%.”

He agreed that he had not raised his family circumstances with the respondent between May 17 and 26 June 2019.

The Complainant confirmed that he was aggrieved by the usurping of both of his loans to the Vulture Fund. He submitted that he was completely cut off by a bank which had previously given him an undertaking of support and assurances. He submitted that Ireland had suffered by the actions of banks and people had died as a result.

He clarified that the matter was not currently before the Financial Ombudsman.

The complainant agreed to forward his signed agreement with the Respondent from December 2017. He concluded by emphasising that the treatment he received can only logically be interpreted as discrimination on grounds of Family status. He had been very distressed by the banks actions which had unjustly threatened the integrity of his Family Farm.

The Complainant forwarded a copy of the signed secured restructured loan agreement post hearing as requested.

The Respondent operates a large Banking Business and has rejected the claim. The complainant has two loans as a full time Dairy Farmer. This is Micro enterprise lending protected by section 48 Lending to Central Bank (Supervision and Enforcement) Act 2013 SME Regulations.   The complainant was required to forward information regarding loan restructuring in January 2019. As this was not forthcoming Demand Letters were issued in March 2019. The complainant had already repaid over 10,000 euro to the loan.

The respondent sought that the claim be dismissed as the complainant had not established a prima facie case of discrimination on Family grounds.

A loan restricting application is based on an assessment of risk and excluded in accordance with section 5(2) (d) of the Equal status Acts. It was a commercial transaction and nothing to do with the complainants Family status.

The Respondent sought the matter be disposed of at Preliminary Argument and relied on Minister for Finance V CPSU [2006] IEHC 14

At the commencement of hearing, the Respondent raised several Preliminary Issues about the claim of discrimination on Family grounds.

Preliminary Issues:

1.The Respondent disputed that the complainant had the locus standi to maintain the claim submitted. The Complainant had locus parentis status and could not avail of family status in accordance with Section 3 of the Act.

2. There was some delay in the ES1 submitted by the Complainant reaching the respondent legal team. The Complainant submitted that a telephone call in May 2019 served as the grounds for the complaint cited on ES 1 form. The complainant had since sought to introduce additional complaints regarding the transfer of loans. This expansion of claim was not cited on the original ES 1 form.

3 The issue of” not honouring a verbal commitment regarding working capital “, the respondent calling out a loan, affecting of credit rating, constitutional rights are not matters comprehended by Equal status Legislation or the jurisdiction of the WRC.

3. The respondent submitted that the complainant had not satisfied the Burden of Proof set down in section 38 A of the Act. Southern Health Board v Mitchell [2001] ELR 201

The complainant had addressed his dissatisfaction with Ms as conversation on May 17 by way of an internal complaint. He had not alluded to his family status or associated his family status as the basis for this dissatisfaction prior to the completion of the ES1 form on 26 June 2019. He has not drawn a link between his family status and his application for credit. The complainant has resorted to assertions and not facts. Darguiz v Lough Corrib Engineering ltd DEC E2009-038 . He has not shifted the burden of proof.

4 Exemption under Section 5(2) (d) of the Equal Status Acts

The Respondent submitted that section 5(1) of the act does not apply in respect of credit products. In relying on A Worker v, A Financial Institute (A DJ 741), where an AO dismissed a claim for discrimination on grounds of disability and reasonable accommodation claiming section 5(2) (d) permitted an exemption on financial and commercial factors.

The Respondent also drew on the test for exemption under section 5(2) (d) set out in A Complainant V A Life Assurance Provider, DEC S 2011-064,

1 Were reasonable steps taken to investigate?

2 Was decision made by reference to actuarial or statistical data which were obtained from a source on which it was reasonable to rely?

3 Was the decision reasonable?

The Respondent has taken reasonable steps to investigate the complainant’s application and personal circumstances. They were not provided with the requested information by the complainant. I t is the Respondents Policy to request all information regarding the borrower’s capacity to repay and this covers an assessment of dependants and income. These were reasonable steps for a respondent to take.

In addressing any potential claim for indirect discrimination, the respondent submitted that the bank had an objective and legitimate aim in requesting income and dependent information when considering credit applications. Application of the statutory regulations of assessment of capacity to repay the loan is a legitimate and proportionate way to avoid customer defaulting.

Substantive Case:

On January 16, 2018 the respondent completed a review on Loan A in the complainant’s name. Payment was not clear. A restructure was sanctioned for 12 months, following which a further restructure review was to occur “to assess if the Account could be returned to full capital and interest repayments “. On November 27, 2018 the complainant via telephone agreed to provide a proposal on yearly repayments going forward. On January 4, 2019, the complainant indicated that the Accountant would provide the details necessary.

In a vacuum of correspondence, On 17 January 2019, the respondent wrote to the complainant and deemed him as “non-cooperating “The next day, the respondent issued a letter reminding the complainant of his non-cooperation and stipulated that if an alternative proposal was not forthcoming within 2 months, repayment of the facilities would be demanded, and banking facilities would be terminated

“This has been an ongoing matter for some time now and we have tried to engage constructively with you. We are not writing to le5t you know that if you do not clear the excess on your account(s) or present an alternative proposal that is satisfactory to the Bank within two months of the date of this letter, then we may terminate your account(s) and banking facilities with us.”

The complainant deferred to his Accountant and authorised his involvement. On 27 February 2019, the Respondent understood the matter was in hand.

On 27 March 2019, in the absence of the required documents a Demand letter was issued for both loans. The respondent accepted that the complainant had continued to make repayments based on the 2018 agreement. However, as a review was required post 12 months of this agreement, the complainant was in breach of agreement. The complainant was asked for immediate payment of both loans, in the absence of this, the respondent told him that they may take all or any steps such as

1 refer to a debt collection agency

2 issue legal proceedings

3 enforce security

The Respondent was aware from a 2017 Lenders Report that the complainant was divorced non-dependent children. The Respondent was not aware of any material change to the complainants living arrangements until he completed a statement of Means form for the Resolutions dept which was received on 29 April 2019 and accompanied by a lending application where the complainant mentioned that had 6 dependents. The complainant had inserted a Child Benefit of €840 net monthly income and this was a variable on the 2017 report.

The Respondent asked for special attention to be given to this chronology which demonstrated the concrete commercial transaction which pre-dated any reference to the complainant’s family status before he submitted the statement of Means Form on 29 April 2019.

On 16 May 2019. Ms A and the complainant spoke on the telephone and a transcript of the call was submitted. They discussed a possible solution to the loan accounts and security held over a site. Ms A advised that she was reviewing the complainant’s application. The complainant confirmed that he was in receipt of child benefit.

The next day, the complainant made an online complaint to the bank. This concerned the difficulty that “calling in the loan “and a demand for the proceeds of sale of site. this was not referenced by the complainant on his ES1 form.

On 13 June 2019, the Respondent confirmed that a full review of the account was underway, and the complainant agreed to close out this complaint.

On 26 June 2019, the respondent received the ES1 form stating that the complainant did not have a positive experience regarding Ms as call on May 16, 2019.

The Respondent replied on 3 July 2019 and confirmed that the phone call had been reviewed and Ms A, who has since left the business, was found to have been professional and courteous during the call and a copy of the contents of the call was cleared for him. The complainant was invited to make further submissions if desired to the Financial Ombudsman.

Mr B, Manager for the Respondent clarified that the complainant’s Financial situation was extremely fragile, and he was provided with 12 months to address this. His loans are still regulated.

The Respondent continued to rely on the submitted exclusions contained in section 5(2) (d) of the acts.

The Respondent solicitor set out the responsibilities of the business about regulation of lending criteria by the Central Bank

Section 14(4) (b) of the SME Regulations provides that a Regulated entity “shall gather and record sufficient information” from the borrower to assess whether that credit is suitable to that borrower to assess the borrower’s ability to repay the debt over the duration of the agreement.

The Respondent submitted that once an alternative arrangement comes to an end, the respondent was bound to assess if a follow up arrangement was necessary.

The Respondent referred to its obligations under the Consumer Protection Code, 2012.to consider and document whether a consumer is likely to meet the financial commitments and bear any risks associated with the loan. The demand in March 2019, arose from a failure on the complainant’s part to provide that requested information.

The Respondent confirmed that the decision to sell 1,000 of the respondent’s portfolio of non-performing loans was made on 1 November 2019. On 4 November 2019 the Respondent wrote to the complainant and informed him that Loan A had been passed for sale to a Finance company.

In concluding, the respondent denied that the complainant had been treated less favourably on family status grounds. The complainant was fixed with an annual review of his loans by the respondent. This was grounded in commercial reality and the complainant failed to grasp the urgency of the deadlines placed before him. He did not honour these deadlines, and this resulted in the demand letter of March 2019.

His complaint of discrimination is ill-judged and misconceived as the respondent urgency was linked to commercial realities and not family status. The delay in his engaging with the bank lay at the complainants’ feet. The complainant ignored the warning letters.

Finally, his inconsistent approach to the May 16 phone call with Ms A coupled with the submission of the complainant to WRC was confusing, but not discriminatory.

The Respondent availed of the opportunity to comment on the signed loan agreement forwarded by the complainant and validated the document.

I have carefully considered both oral and written submissions in this case. I have also reviewed the case law relied on by the respondent. I had the benefit of listening to a play back of the May 16 phone call referred to in the complaint.

Preliminary Issues:

This is a complaint of discrimination on family grounds by the Complainant and disputed by the Respondent. I am satisfied that the complainant complied with his obligations on notification set out in Section 21 of the Act. I note that an internal delay surrounding the circumstances of reception of this document occurred on the respondent side. However, note that the respondent acknowledged receipt of the ES1. The respondent did not issue an ES2. It is important for the purposes of my investigation to reflect that there was an overlap in the complaints processes adopted by the complainant. From the respondent file, the complainant made an online commercial complaint on 20 May 2019. This must be regarded as a separate and distinct process which appears to have concluded on 13 June on the undertaking to complete a full financial review.

I am working on the complaint lodged to the WRC on 12 November 2019. I agree with the respondent that the complaint is somewhat expanded on the detail given on the ES1 form as by then the Respondent had allocated Loan A to a Vulture Fund.

It is important for me to explain to the parties that my sole remit in this case is to establish where the complainant had been discriminated against because of his Family status. He has not provided a comparator for me to consider.

Section 3 of the Equal status Acts prohibits less favourable treatment on family grounds. Judy Walshe in her book titled Equal status Acts 2000-2011 explains:

“the basic idea behind direct discrimination prohibitions is that individuals should be treated according to their actual characteristics rather than based on prejudicial or stereo typical assumptions. It should operate as a means of eliminating illegitimate considerations from service providers processes and practices “

Section 3 of the Act defines discrimination as;

(a)    Where a person is treated less favourably than another person is has or would be treated in a comparable situation on any of the grounds specified in subsection (2) which-

1.       Exists

2.       Existed, but no longer exists

3.       May exist in the future

4.       Is imputed

The definition of Family status comprises of three distinct categories of people.

‘discriminatory grounds’ has the meaning given by subsections (2) and (3B) of section 3;

“family status” means being pregnant or having responsibility—

(a) as a parent or as a person in loco parentis in relation to a person who has not attained the age of 18 years,

I am satisfied that the complainant is acting in loco parentis and can avail of the ground of Family status for the purposes of this case in accordance with section 3(2) (c) of the Act.

Section 5 of the Act outlines the rules in relation to disposing of goods and services. The respondent has sought an exemption in accordance with section 5(2) (d)

5.— (1) A person shall not discriminate in disposing of goods to the public generally or a section of the public or in providing a service, whether the disposal or provision is for consideration or otherwise and whether the service provided can be availed of only by a section of the public.

(2) Subject to subsections (4) and (4A), subsection (1) shall not apply in respect of

(a) an activity referred to in section 7(2),

(b) a service related to a matter provided for under section 6, or a service offered to its members by a club in respect of which section 8 applies,

(c) differences in the treatment of persons on the gender ground in relation to services of an aesthetic, cosmetic or similar nature, where the services require physical contact between the service provider and the recipient,

(d) differences in the treatment of persons in relation to annuities, pensions, insurance policies or any other matters related to the assessment of risk (other than on the gender ground or in any other circumstances to which the Gender Goods and Services Directive is relevant) where the treatment—

(I) is affected by reference to—

(I) actuarial or statistical data obtained from a source on which it is reasonable to rely, or

(II) other relevant underwriting or commercial factors,

and

(ii) is reasonable having regard to the data or other relevant factors,

I have considered both parties presentations on this point and I have returned to the provisions of section 5(2) (d), I am not satisfied that the annual review sought by the respondent and agreed with the complainant in early January 2018 can be described as an annuity, pension or insurance policy. This was a secured loan which had been restructured by agreement and I cannot establish that it fits “a matter related to assessment of risk “, From my perusal of the restructuring agreement, the loan had been firmly secured and the risk had been managed therein. I am not able to grant the exemption requested as what had been sought by the respondent was a statement of means regarding a provision of service. This is what triggered the complaint on family grounds.

Section 2 of the act provides a definition of service:

“service” means a service or facility of any nature which is available to the public generally or a section of the public, and without prejudice to the generality of the foregoing, includes—

(a) access to and the use of any place,

(b) facilities for—

(I) banking, insurance, grants, loans, credit or financing,

I observed at hearing that the complainant carried a high level of disenchantment with the respondent in business terms. He ventilated his distress at his perceived changed face of a bank which he understood had previously been in his corner. He attributed this solely to his changed family circumstances. I accept the respondent submission that the complainants changed family status was not known to them until April 29, further clarification followed on the May 16 phone call regarding Child Benefit payments. Once again, I must re-affirm that my role is to establish whether the complainant was discriminated against.

To this end, I have set out the burden of proof required by the complainant in this case.

Burden of proof.

38A

38A. — (1) Where in any proceeding’s facts are established by or on behalf of a person from which it may be presumed that prohibited conduct has occurred in relation to him or her, it is for the respondent to prove the contrary.

(2) This section is without prejudice to any other enactment or rule of law in relation to the burden of proof in any proceedings which may be more favourable to the person.

I have found that the complainant and respondent had a long history of commercial transactions prior to the circumstances of this case. This business arrangement had manifested into two active loans. One of which has now been corralled by a Vulture fund and it is this transaction and it perceive negative curtailment that has disturbed the complainant in the main.

I realise that I did not meet Ms A, but I listened to the record of the phone call, which was not disputed by the complainant. The questions she asked were asked in the context of an already submitted statement of means dated 24 April 2019. The respondent submitted that the complainant had not been asked to declare his partners earnings.

I reviewed the statement of means and noted that the complainant had given his permission to the storage of this data and its use “in relation to the facilities under consideration “and the information was to be used for that purpose. This was personal data. He had volunteered details of income received under child benefit, and other benefits. I found it reasonable that the respondent would probe this in a Commercial transaction.

The complainant asked that I consider his submission that the changed face of the respondent had been precipitated by his notification of his changed family status. I have had some difficulty with this given the antecedence of the restructured loan agreement and the foreseeable review of finances at year end.

I appreciate that tragedy visited the complainant and his family in January 2019 and these amounted to pressing circumstances. The complainant was unclear if he told the respondent of their occurrence. The respondent submitted that they were unaware of the nature of the tragedy. I note a record on the respondent on line complaint dated 20 May 2019 which attributed the delay in submitting paper work was due to a death in the family. There was no expansion on the proximity of the relationship.

However, I am satisfied that the respondent and the complainant had already entered correspondence on seeking details for the financial review at that time. An undertaking had been provided by the complainant to submit paperwork on the continuance of loan terms and this was outstanding during the May 16 conversation with Ms A.

I can understand how a tragedy could overwhelm anyone, and I have sympathy for the complainant in that regard, however, the complainant is clear that he had delegated the task of financial records to his Accountant. I found that the chanced face attributed to the respondent was wholly attributed to the commercial reality the parties found themselves in an increasingly fragile financial relationship in a regulated environment.

The phone call between Ms A and the complainant constituted a sequential procedural follow up and scrutiny in this commercial transaction and was not an act of discrimination.

The complainant has not raised facts from which I can presume that discrimination on family grounds has occurred. He had not met the test set down in section 38A of the Act.

In his post hearing documentation, the complainant continued to refer to the enormity of the impact of the Vulture Fund transaction on his economic viability. The respondent objected to this inclusion.

For my part, the complainant had been given a broad opportunity to state his case at hearing and I had asked for the Loan agreement. I have not taken account of this post hearing submission outside of the requested Loan Agreement.

I have found the complaint of discrimination on family grounds to be not well founded.

Section 25 of the Equal Status Acts, 2000 – 2015 requires that I decide in relation to the complaint in accordance with the relevant redress provisions under section 27 of that Act.

I have concluded my investigation and have found that the complainant has not made out a prima facie complaint of discrimination on family grounds. His claim is not well founded.