100,000 set for debt relief after ruling on illegal loans
Up to 100,000 people with loans from moneylenders could be in line to have their borrowings wiped out and to get compensation.
The development follows a case won by a Donegal couple who took on the State's largest moneylender through the Financial Services Ombudsman.
They had loans from Provident Personal Credit, but were illegally offered new loans before they paid off the old ones.
The couple complained to the ombudsman, won their case and got compensation.
They had £4,370 (€6,780) in loans written off, and were awarded £450 (€698) each in compensation. The ombudsman's written finding, which has been seen by the Irish Independent, lists the monetary amounts in sterling.
Now experts say that up to 100,000 people who are estimated to have had their moneylender loans illegally rolled over into new loans could be in line to have them written off and receive compensation.
In 2013, the Central Bank found that a quarter of the more than 360,000 customers of moneylenders were offered new loans before they had cleared their existing one. It is thought that even more people are now borrowing from moneylenders.
Provident was fined €105,000 by the Central Bank last December after the illegal refinancing of existing loans was brought to its attention through Sinn Féin finance spokesman Pearse Doherty. Mr Doherty had been in contact with whistleblowers, who worked for the company.
Mr Doherty criticised the Central Bank for failing to do more to ensure that affected customers were compensated for having loans illegally refinanced.