The Equality Tribunal
3 Clonmel Street
Equal Status Acts, 2000 to 2008
Equality Officer Decision
Mr Igor Tesinsky
Bank of Ireland
File Ref: ES/2009/119
Date of Issue: 3 March 2011
Delegation under the Equal Status Acts, 2000 to 2008
This complaint was referred to the Director of the Equality Tribunal under the Equal Status Acts, 2000-2008. In accordance with his powers under Section 75 of the Employment Equality Act, 1998 and under the Equal Status Acts, 2000-2008, the Director delegated the complaint to me, Elaine Cassidy, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part III of the Equal Status Acts, 2000-2008. On 26th November 2010 my investigation commenced, when the case was delegated to me. As required by Section 25(1) and as part of my investigation, an oral hearing of the matter was held on 1 February 2011 and both parties were in attendance. Following the hearing, there were a number of exchanges of documents between the parties and this process was concluded on 24th February 2011.
This dispute concerns a claim by the complainant, Mr Tesinsky ("the complainant") that he was discriminated against by the Bank of Ireland (hereafter "the respondent" or "the bank") on the grounds of race, in terms of Section 3(2)(h) of the Equal Status Acts, 2000-2008 in being refused a service, which is generally available to the public contrary to Section 6(1) of the Equal Status Acts, 2000-2008.
Summary of the Complainant's Case
2.1 The complainant is Slovakian. He has been a customer of the respondent since 2005. In 2009, he applied for a personal loan from the respondent via their online system. He had briefly discussed the matter with a customer service agent at a city centre branch of the Bank of Ireland and he had noted during this conversation that the interest rates would be more favourable if he applied online rather than at a branch. Therefore in June 2009, he applied via the respondent's website for a loan of €65,000 over 3 years in order to buy bonds. He intended to pay back the loan with the profit from the bond and/or his savings. When he did not receive a response from the bank within the next couple of weeks, he contacted them by phone. He was told that his application had been denied and a letter should have issued to him to this effect. The letter was issued to him following the call and this letter stated that the loan was declined on the basis of the information supplied. The letter invited the complainant to send in any additional information to support his application. He was also invited to make a future loan application if his circumstances changed.
2.2 The complainant responded by letter to advise the bank that he had qualified as a professional accountant since he moved to Ireland, that he was employed as a credit analyst and that he had intended to apply for a loan range of 20,000 to 65,000, but that the online form only allowed him to choose a specific amount. This letter was entitled "An appeal against the decision on the personal loan application" and sent to the Customer Service Unit. The "appeal" was turned down and the complainant was informed by letter.
2.3 Following the above, the complainant sent a complaint to the Customer Care Unit, complaining that 1) he had to ask for the original decline letter, whereas it should have been sent to him 2) the reasons given for refusing the loan were vague and in his opinion there was no good reason for the refusal 3) he should have been given the name of the person who was dealing with his application so that he could talk to them. The respondent Customer Care Unit responded by letter apologising for the frustration experienced and suggesting that he visit his local branch to discuss the loan in person and in more detail with a financial advisor. They also provided the details of the Financial Ombudsman, in the event that he was dissatisfied with this response.
2.4 The complainant responded by letter to say that his local branch was not convenient and in any case he was more knowledgeable than the bank's financial advisors. He reiterated that his credit standing was very strong and provided his mobile number again so that they could call him for details. The respondent replied to this letter and re-stated their position, again offering the details of the Financial Ombudsman.
2.5 The complainant claims that if he had been an Irish customer, he would not have been treated in this way by the bank. He claims that if he had been an Irish customer, they would not have forgotten to send him the first letter and they would have given him a proper name and contact number to talk to someone at the bank. He claims that if he had been an Irish customer, they would have investigated the details of his bank history to understand more deeply the variances in his salary. If they had done this, they would have realised his credit rating was better than they had initially thought. He also claims that he had in fact an excellent credit rating, with savings in excess of the amount he sought to borrow and therefore if he was Irish they would have given him the loan. He submits that they thought that because he is a foreigner, he would not know his rights.
2.6 In later submissions, the complainant also claimed that the bank's credit policy itself is discriminatory. He claims that the bank's assumption about the minimum level of net discretionary spend (ie: customer's income - (loan repayment + fixed outgoings such as rent)) is too high. He claims that this level of discretionary income may be required by an Irish person, but he would not require such a high discretionary monthly spend and he could choose to live more frugally.
Summary of the Respondent's Case
3.1 The respondent submits that customers may request loans of up to €65,000 through their online application process. Notwithstanding the maximum amount, the website is generally used for much smaller personal loans. Generally customers who want larger loan facilities or who wish to borrow for investment purposes, would speak to a financial advisor in person. The bank submits that less than 2% of online applicants in 2009 sought the maximum amount.
3.2 The bank submitted that their process for loan applications (of the amount sought by the complainant) would be to send them to their underwriting department. The underwriters then assess the application against specific criteria and make a decision to approve or deny the loan. This decision is reviewed by an underwriting manager (for loans of this size). The underwriter would then update the status (approved/denied) in their system and an automatic letter would be generated and sent to the customer. The respondent submitted in evidence the actual screenshot of the complainant's application, showing that the application was denied and some notes made by the underwriter. They accept the complainant's contention that he did not receive the letter which was automatically generated and they submitted that it may not have been posted, as a result of human error.
3.3 The respondent submit that they deliberately do not send a detailed letter to applicants describing why a loan is denied. This is for reasons of commercial sensitivity - they do not want their underwriting criteria known to their competitors. They submitted the letter in evidence to the Tribunal and stated that this is a standard letter automatically generated by their IT system and sent to all unsuccessful applicants, regardless of nationality.
3.4 With respect to the "appeal" process, the respondent stated it is not an appeal, but rather an invitation to provide more information which is relevant to the loan application. The submitted that Mr Tesinsky's follow-up letter was treated in the same way as all others - ie: his letter was sent again by customer service to the underwriting team to re-assess and the outcome of the re-assessment was communicated by letter from the customer service team to the complainant. They provided a screenshot from their underwriting system in evidence of this step. In response to the complainant's claim that someone should have called him to discuss the matter further, the respondent was very adamant that they do not allow their underwriters to contact customers. The underwriting team are specifically required to remain objective and make their determination based strictly on the information provided on the application form and their own validation of this information. The bank specifically refutes the complainant's allegation that they would have made additional inquiries of an Irish person, which it did not make of the complainant.
3.5 The respondent described the underwriting criteria to the Tribunal; however it cannot be detailed here for commercial reasons. It may be said however that their most important criteria in determining the outcome of a loan application, is the borrower's ability to repay. This is judged by determining the borrower's net permanent income and then deducting his regular outgoings such as rent, as well as deducting the proposed loan repayments. After these deductions are made, the bank require that a specific minimum amount is remaining. In the present case, they submitted that, based on the information provided, the complainant's net disposable income was only 78% of this minimum requirement. On this basis they submitted that there was no way they would give him a loan, all the more so because he was seeking the loan for a speculative purpose. (They further submit that this figure is based on the higher salary figure provided by the complainant on his application form. (They pointed out that the actual salary payment which they could see being paid into the complainant's bank account was €500 less than this, which put him even further away from the minimum amount required). The bank stated that it is their policy to base their credit decisions on permanent and guaranteed income only, and not on variable or fluctuating income such as bonus payments.
3.6 The respondent stated that it cannot be said that they were trying to take advantage of the complainant's status as a non Irish national to deny him his rights, because they offered him the details of the Financial Ombudsman on two occasions. They also stated that the complainant is clearly a valued customer of theirs, as he is a holder of a gold credit card.
Conclusions of the Equality Officer
4.1 The Equality Officer must first consider whether the existence of a prima facie case has been established by the complainant. Section 38(A) of the Equal Status Acts, 2000 to 2008 sets out the burden of proof which applies in a claim of discrimination. It requires the complainant to establish, in the first instance, facts upon which he/she can rely in asserting that prohibited conduct has occurred in relation to him/her. It is only where such a prima facie case has been established that the onus shifts to the respondent to rebut the inference of discrimination raised.
4.2 The complainant has claimed that he was treated badly when he was not offered a loan by the bank and also in their treatment of him as a customer. Both parties have submitted evidence to show that they are in agreement as to the sequence of events and the interraction between them. The disagreement arises in terms of the complainant's perception of how he was treated and his understanding of the loan refusal. The respondent has explained their reason for not offering a loan to the complainant and shown evidence of this to the Tribunal. I accept that their refusal was based exclusively on their underwriting criteria, which was based primarily on the complainant's capacity to repay the loan, which in turn was based on the information provided by the complainant. The complainant insists that the respondent should have contacted him and should have made a greater effort to find out more about his financial background (for example the details of his savings which could have guaranteed security on the loan) before they refused him. The respondent on the other hand states that it was entirely the responsibility of the complainant to make any relevant information available to them during the application process and he did not do this. During the oral hearing, the respondent's Head of Mortgage and Consumer Credit described in detail how the underwriters rely upon the application form and the significance they attach to the information provided by the applicant. Based on this oral evidence of this witness, I accept the respondent's contention that it was the complainant's responsibility to proactively make his best possible application to the bank.
4.3 I do not dispute that the complainant might in reality have had a good background to support his loan application to the bank. However as noted above, I have accepted the bank's contention that it was entirely his responsibility to make his full case available through the webform, and if that was not possible due to the limitations of the form itself, then he should have made his application in person, by visiting a branch office as invited. It is clear that the online process is by its nature, less personal than visiting a branch office.
4.4 The complainant has also argued that the criteria set out in the underwriting criteria were discriminatory towards him, on the basis that he does not drink, smoke, eat out, drive or take as many holidays as an Irish person would. Therefore he would be able to live on a lower discretionary income. Essentially this is an argument of indirect discrimination, which requires evidence in order to establish a prima facie case. On this occasion, there is no evidence whatsoever that foreign nationals are less likely to take part in any of the above activities. Therefore no case of indirect discrimination has been made out and the respondent does not have to defend their underwriting criteria. (The complainant also gave details of his personal consumption preferences, which are irrelevant as they could not have been known to the bank during the underwriting process, even in the very unlikely event that the bank chose to consider them, instead of applying their standard rules).
4.5 In summary the main thrust of the complainant's case is that he was not treated in a personal way by the bank. They sent him standard decline letters and they did not call him to flesh out the details on his web application form. The bank has demonstrated that they followed their standard procedures in handling the application (notwithstanding the mislaid letter), the "appeal" and in all of their correspondence with the complainant. Therefore these complaints are based around the complainant's expectations of customer service for online applications, and his frustration with what he considered to be a lack of personal attention to his situation. They do not relate in any way, either directly or indirectly, to the ground under the Equal Status Acts.
4.6 Therefore even taking the complainant's case at its height, I find that the complainant has failed to make any connection whatsoever between his nationality and the conduct of the respondent. I find that he has failed to shift the burden of proof to the respondent and therefore I find it unnecessary to examine the respondent's defence in any further detail.
5.1 On the basis of the foregoing, I find in favour of the Respondent.
3 March 2011