Tuesday 25 September 2018

Cost of tracker mortgage scandal approaching €1bn

€600m for redress and compensation, and €300m for costs
€600m for redress and compensation, and €300m for costs
Charlie Weston

Charlie Weston

THE cost of the tracker scandal for banks is approaching €1bn.

Central Bank Governor Philip Lane told the Oireachtas Finance Committee the main lenders have now made combined provisions of €900m in respect of the examination.

This is broken down as €600m for redress and compensation, and €300m for costs.

Prof Lane said one lender has up to 500 people working on its redress scheme.

Central Bank Governor Philip Lane. Picture: Collins
Central Bank Governor Philip Lane. Picture: Collins

The committee was told just before Christmas that banks discovered 13,600 extra cases following pressure from the regulator in the closing months of last year.

Close to 34,000 bank customers had good-value trackers wrongly taken off them, or were put on the wrong rate. Others were not told of the implications of losing a low-cost tracker.

The Central Bank boss said regulators continue to challenge banks to own up to tracker-loss cases.

“While the Central Bank’s view is that the vast majority of customers have now been identified, we will continue to review, challenge and verify the work undertaken by the lenders and complete our intrusive on-site inspection programme, which is probing lender compliance with all aspects of the examination framework and gathering evidence to support our enforcement activity,” he said.

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