Discovery of document leaves KBC facing fresh tracker calls
Published 13/05/2016 | 02:30
Leading bank KBC has been called on to restore customers to tracker mortgages after it was claimed they were wrongly denied the good-value home loans.
The call came after a document emerged that was sent by the bank to brokers promising to move mortgage holders who completed a fixed rate to a tracker.
The document dates from 2006 when the bank was called IIB Homeloans.
KBC is the latest bank to be caught up in the tracker-denial scandal.
The Central Bank is taking enforcement action against Permanent TSB and Ulster Bank over their failure to put customers who fixed for a period back on their trackers.
Interest rates on trackers are a fraction of those on fixed and variable rates.
Typical customers on a tracker are paying around €400 Less a month than someone on a similar sized variable rate.
Financial adviser Padraig Kissane, who specialises in tracker cases, called on KBC to immediately restore people who lost the low-cost mortgages back to that rate.
He is dealing with 100 KBC cases, but claims there could be up to 2,500 customers of the bank affected.
KBC Bank, which was called IIB up to 2009, conducted most of its lending through mortgage brokers.
In November 2006 the bank sent brokers a circular entitled "Fantastic News from IIB Homeloans," document obtained by RTE News show.
The document states: "All IIB Homeloan fixed rates will now roll onto tracker rate upon expiry. Offering your clients even better value."
The document will form part of a report Mr Kissane's has been asked to completed for the Central Bank on behalf of clients.
Mr Kissane said: "I am calling on KBC to restore all those who should be on trackers immediately."
The bank said: "KBC is progressing with the tracker review process and timings as set out by the Central Bank of Ireland and has no further comment to make at this stage."
It is understood the bank has hired consultancy Deloitte as part of its review for the Central Bank.
Thousands of people had trackers wrongly taken off them, and they are now in line to have them restored, to have overpayments refunded, and get compensation once a Central Bank review of all banks is finished.
The final number of families affected across all banks could be as high as 10,000.
AIB is understood to have around 3,000 cases, with another 2,000 at Bank of Ireland.
But it will be 2017 before the industry-wide probe is completed, the Central Bank said this week.
Banks have been told by regulators to now move to the next phase of the investigation and identify any customers impacted by their failure to restore them to trackers.