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exclusive Bank of Ireland to be fined millions over tracker scandal

Lender has set aside €120m to deal with its tracker-related issues

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Bank of Ireland's Francesca McDonagh who has left the bank for another job. Photo: Fergal Phillips

Bank of Ireland's Francesca McDonagh who has left the bank for another job. Photo: Fergal Phillips

Bank of Ireland's Francesca McDonagh who has left the bank for another job. Photo: Fergal Phillips

BANK of Ireland is expected to be levied with a multi-million euro fine by the Central Bank tomorrow.

The bank has set aside €120m to deal with tracker-related issues, including an expected fine.

It is the last of the big lenders to be fined over the tracker mortgage scandal.

Earlier this summer AIB and its EBS unit were hit with a fine of close to €100m for denying people tracker mortgages.

The AIB Group wrongly denied almost 13,000 borrowers their right to then cheap mortgages linked to the main European Central Bank rate.

Bank of Ireland was forced to compensate more than 15,000 tracker customers, the largest number of any of the lenders found so far to have mishandled tracker cases.

These cases include people wrongly denied a tracker and homeowners who were on the wrong tracker rate.

In some cases, banks incorrectly interpreted legal or contractual terms and conditions, denying some customers their right to a tracker.

Banks also failed to warn customers of the consequences of coming off their tracker mortgage to opt for a fixed rate for a period. These people were told at the end of the fixed period that they could not get back on their good-value tracker.

In June the Central Bank fined AIB Group €96.7m for its consumer-protection breaches during the tracker mortgage scandal.

It was the largest fine given by the Central Bank during investigation into tracker mortgage accounts.

A tracker mortgage is a type of home loan where the interest rate charged on the mortgage follows that of another publicly-available rate, typically the interest rate set by the ECB.

The five main banks that were involved in the Irish tracker mortgage scandal are AIB, KBC, Permanent TSB, Bank of Ireland, and Ulster Bank. EBS, a subsidiary of AIB, and Springboard mortgages, a subsidiary of Permanent TSB, were also involved.

Around 40,000 customers were wrongly removed from their tracker mortgages across all the lenders and moved onto a higher interest rate. In some cases, people lost their homes due to the scandal.

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Former Bank of Ireland group chief executive Francesca McDonagh said resolving the tracker issues at the bank was a top priority for her when she took up her role.

“I believe that the way in which we address this issue will define the customer centric culture we aspire to at Bank of Ireland and this is why I have made resolving this issue my personal priority since joining the bank,” she said.


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