IBRC in 'overcharging' inquiry
The IBRC has begun an investigation to establish the extent to which clients of the former Anglo Irish Bank may have been overcharged on the repayment of their loans through the application of excessive interest, the Sunday Independent can reveal.
The review which has been ordered by the bank's special liquidators Kieran Wallace and Eamonn Richardson comes on foot of a High Court judgement in October 2014 which found that a former Anglo client had been overcharged by an extra five days interest per annum.
In the course of granting an application to the former Anglo Irish Bank for summary judgement against the Dublin-based developer John Morrissey for the recovery of a €31m loan, Ms Justice Mary Finlay Geoghegan found the bank had been charging Mr Morrissey interest based on 365 days in a year as opposed to the 360 day year contained in the terms of his loan document. The overcharging in Mr Morrissey's case began in 2002 and continued until 2014. IBRC's special liquidators wrote last week to clients of the former Anglo Irish Bank informing them that an issue "has arisen concerning the manner in which interest was calculated and applied to loan balances".
In the letter, they said: "The bank is currently undertaking a review exercise to determine whether and to what extent this issue may affect borrowers' outstanding liabilities. As a result, the balance/interest amount in respect of your loan accounts may be subject to change in the future."
A spokesman for the IBRC declined to comment on the matter when contacted by this newspaper.
The IBRC previously refunded some €50m to customers for overcharging which occurred in the eight-year period leading up to 2004.
In its initial estimate of the problem in 2010, the bank had expected to refund €100m.