News Editorial

Wednesday 26 October 2016

Treatment of PTSB customers appalling

Published 29/07/2015 | 02:30

Yesterday's revelations about PTSB were breath-taking
Yesterday's revelations about PTSB were breath-taking

Economist Joseph Stiglitz has been a stern critic of banks. "Rather than justice for all, we are evolving into a system of justice for those who can afford it. We have banks that are not only too big to fail, but too big to be held accountable," he once observed.

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His words spring to mind on hearing that a bank can blunder and at least 22 families can lose their homes. In this instance the bank, Permanent TSB, is being held accountable, but only after several legal hurdles have been cleared.

Yesterday's revelations about PTSB were breath-taking. But thanks to the Central Bank, almost 1,400 mortgage holders with PTSB and Springboard Mortgages will receive compensation as a series of failures related to tracker mortgages and mortgage overpayments were uncovered. These failures were identified as a "key factor" in the loss of ownership of at least 22 properties.

Between the years 2006 and 2012, some 61 people had properties repossessed, but 22 had their homes repossessed because of the higher interest rate they were incorrectly charged.

What makes the situation so much worse was that the bank fought at every turn, refusing to accept its behaviour was in any way questionable.

It first took on the financial services ombudsman, it lost in the High Court, yet undeterred it battled on up to the Supreme Court. It eventually withdrew.

Even now, the lender, which it must be remembered, was until recently almost entirely owned by the State, is offering just €50,000 to people who lost their homes as a result of being overcharged mortgage interest for five years or more. The consumer campaigner David Hall has described the offer as an "insult", adding: "1,400 people have been treated terribly by a State-owned bank and there has been silence from the Government and from consumer agencies."

It is very hard to argue with his sentiments, nor should it be forgotten that the bank benefited from a €4bn bailout from the taxpayer as recently as 2011.

Irish Water saga goes from farce to fiasco

It's well known that water can make the straightest stick look crooked. Now we now also know that it has a limitless capacity to make a Government look silly. Very, very silly.

Few imagined that the bad news surrounding Irish Water since its inception could possibly get any worse, but it has. And then some. Eurostat's confirmation that the company has failed the Market Corporation Test and therefore must remain on the State's balance sheet has made a very bad situation considerably worse. The litany of failings is stark. The utility falls down over board appointments and operations, according to the EU statistics agency.

Funding was also highlighted as a reason for fluffing the test. Most dismally of all, Eurostat zoned in on the "lack of economically significant prices, concerning in particular the capping of fees for households, with 70pc of households expected to be protected by the price cap." It was also greatly troubled by the fact that "the quantitative criterion is not met" - the '50pc test', which holds that sales must cover at least 50pc of the production costs.

The Government has see-sawed from farce to fiasco, budgetary arithmetic has been shown to be way off and credibility has been shredded. Public confidence is rapidly draining away.

Irish Independent

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