PTSB chief faces public grilling on mortgage overcharging
Published 03/08/2015 | 02:30
Bank chief Jeremy Masding faces a public grilling by TDs and senators to explain the overcharging scandal that is set to cost his State-controlled bank tens of millions of euro.
The scale of problems at Permanent TSB could be larger than initially thought, according to the head of the office of the Financial Services Ombudsman (FSO), Ger Deering.
At least 1,372 customers are due to be compensated by the bank after it failed to inform them that they would be penalised for changing their mortgage terms by being blocked from moving to a tracker-rate deal down the line.
At least 22 customers lost their properties as a direct result, and it was a factor in 39 additional cases, the bank has said.
Yesterday, Mr Deering told RTÉ's 'This Week' that 25 out of 100 cases brought by PTSB customers to his office in relation to their tracker mortgage contracts are not covered by a redress scheme announced last week.
Those complaints will now be fast-tracked, he indicated.
A spokesman for PTSB said each of those additional cases would have to be looked at individually and the bank was not aware of any other systematic or widespread problems. An enforcement investigation under way by the Central Bank is likely to lead to multi-million euro fines being levied against the bank. That money should go to affected customers, according to financial adviser Padraic Kissane, who is representing a number of those affected.
Meanwhile, Mr Masding should be called before the Oireachtas Finance Committee to answer questions over the overcharging scandal, Fianna Fáil's finance spokesperson, Michael McGrath, said yesterday.
Finance Committee hearings into the scandal would also include other witness from the bank, from the Central Bank and from the Office of the Financial Ombudsman, it is understood. Speaking to the Irish Independent, Mr McGrath said there should be "a number of hearings" before the committee to "address a number of issues".
"This absolutely needs to go as high as Mr Masding," said Mr McGrath.
"It is a very serious issue. I am calling on him to face the committee.
"Many things need to be addressed here. Firstly why they fought it tooth and nail until they got the deeds of these people's homes.
"The committee also needs to examine an appropriate compensation package for these families. How customers coming off fixed-rate terms are being treated also needs attention. We need to get down to the nitty-gritty of it."
Fellow committee member Fianna Fáil TD Timmy Dooley said: "The bank's cavalier approach has had a devastating impact on the lives of some distressed borrowers. The people behind this need to be exposed and made answer in public for their actions."
The make-up of two committees that are being set up to oversee the compensation process for customers is due to be announced as early as today. Customers who have lost their homes have been offered an initial €50,000 payment while the process is in train. Final payouts are likely to be multiples of that.