PTSB is accused of unfair treatment on trackers
Published 28/08/2015 | 02:30
Permanent TSB has been accused of being unfair in the way it is restoring large numbers of those who lost tracker mortgages.
The bank has been accused of putting hundreds of mortgage holders back on trackers at interest rates far in excess of what is reasonable.
The bank is restoring some trackers at interest rates of 3.25pc, when most of those on trackers in the market pay a rate of just 1.05pc.
The move affects a few hundred of those who were overcharged as they did not have a tracker interest rate specified in their contracts.
Permanent TSB has been forced to restore almost 1,400 customers to tracker rates and compensate them for being overcharged.
Most are putting restored to low-priced trackers.
A tracker rate can only move at set percentage over the main lending rate of the European Central Bank rate.
The ECB rate is 0.05pc at the moment, with most trackers in the market set at a margin of 1pc over this.
This means the majority of tracker holders are paying just 1.05pc on their mortgages.
But Permanent TSB has now admitted almost 800 overcharged customers are now being put on trackers that are on a margin of more than 1pc above the ECB rate.
Close to 500 of these are on a tracker margin of more than 2.3pc.
A number have been told their tracker rate will be set at 3.4pc over the ECB rate, which experts said was closer to a variable rate.
Founder of Askaboutmoney.com Brendan Burgess said overcharged customers getting letters from the bank were surprised the restored tracker rate was so high.
"This is a very significant issue if people are getting their trackers back but the margin they are being offered is 3.25pc leaves them feeling very disappointed."
He said people with no margin specified in their original mortgage offer were being offered wildly different tracker rates.
However, a spokesman for Permanent TSB stated: "The tracker interest rate that is being offered to impacted customers is the rate that they had a contractual right to be offered at the maturity date of their fixed-rate period, had the failure not occurred."
The rate will vary from customer to customer, the bank said.