Bank hands out €300,000 to customers over tracker 'mix-up'
BROKERS have claimed that Ulster Bank has been forced to restore large numbers of homeowners to valuable tracker mortgages.
One broker said he had secured a total of €300,000 in compensation from the bank over its failure to put people back on trackers when they finished on fixed rates.
Padraic Kissane, of Kissane Financial Services in Dublin, said he has now got 13 of his clients put back on trackers with Ulster Bank.
And AIB has admitted it has also had to restore a number of its home-loan customers to tracker mortgages.
Last year, Bank of Ireland was forced to put more than 2,000 customers back on trackers and also compensate them.
In the cases at all three banks, the homeowners had opted to move from trackers to fixed rates – but the banks had failed to outline in letters sent at the end of the fixed period that the customers had the option of going back on the tracker rate.
Central Bank rules also force the banks to warn customers of the cost implications of coming off a tracker to move to a fixed rate or a variable rate.
Tracker rates are tied to the European Central Bank (ECB) base rate, and can only change when it moves. Trackers are typically set at 1pc above the ECB rate, making them by far the cheapest mortgages in the market.
Mr Kissane said that in the cases he dealt with, customers got compensation from Ulster Bank for the higher interest they had paid after they came to the end of a fixed rate but were not restored to their tracker, as specified in their loan contract.
And another broker, Bob Quinn of MoneyAdviser.ie, said he had secured a refund of €7,000 for one customer and €25,000 for another mortgage holder from Ulster Bank.
In both cases the homeowners came to the end of three-year fixed rate deals in 2009 and it was not made clear to them that they could go back to their trackers.
Mr Quinn claimed there was a particular problem at Ulster Bank where people were not moved back to trackers, as outlined in their contracts, if they opted to fix for a while.
An Ulster Bank spokeswoman said: "Our customers are dealt with on a case-by-case basis and we do not comment on individual customer cases."