AIB under pressure at AGM over refusal to add 6,000 customers to tracker redress programme
AIB is expected to come under pressure at its annual general meeting today over its decision to refuse customers a tracker rate and proper compensation.
It comes after new bank chief executive Colin Hunt was told the failure of the bank to add 6,000 customers to its tracker redress programme would be a “personal stain” on his reputation.
The bank is holding out, arguing that it has dealt with the cases.
It has given the 6,000 homeowners compensation of just €1,600 each as they were denied a tracker mortgage.
It admits the customers were wrongly denied the option of moving to a tracker contract when their fixed-rate contracts expired from 2008, but the bank won’t put them back on a low-cost rate.
It argues it abolished trackers by the time the customers came off a fixed rate, so they would not have benefited from a low tracker rate.
It claims the “prevailing tracker rate” they would have been entitled to at the time was 7.9pc due to high funding costs.
This is much higher than the prevailing variable rate at the time. This means, the bank argues, the customers are only entitled to a small level of compensation and are not due to get a tracker rate. It said it was paying them €1,615 each due to a “service failure”.
Consumer advocate Brendan Burgess has encouraged the affected customers to appeal the bank’s refusal to put them back on a tracker and fully refund them for their time on a higher rate, and pay compensation.
He has called on the customers to appeal though AIB’s internal tracker appeals mechanism.
However, Dr Hunt told the Oireachtas Finance Committee earlier this month the appeals panel has so far rejected 95 out of 96 cases presented to it.
The banking group has already refunded and compensated 11,900 other tracker customers.
Mr Burgess has been fundraising to mount a High Court challenge to force the bank to pay more and restore customers to trackers.
Dr Hunt came under sustained criticism on the prevailing rate cases at the Finance Committee earlier this month.
The AIB boss had described the overall tracker issue as a stain on the reputation of the bank.
But Sinn Féin’s Pearse Doherty told Dr Hunt: “You acknowledge that this is a stain on the reputation of AIB, but it will be a personal stain on your reputation if you don't sort it out.”
Fianna Fáil’s Michael McGrath was highly critical of the bank and pointed out that there was little difference between a service failure and a breach of contract.
An AIB spokesman said: “The customer grouping in question did not hold a tracker mortgage. Notwithstanding this fact, AIB has provided them with a payment. We are in the final stages of the tracker mortgage examination with payments issued to the vast majority of customers. Over 99pc of impacted customers have received payment.”
The bank said its tracker review is ongoing and is subject to continuous engagement with the Central Bank.