Business Property & Mortgages

Sunday 21 October 2018

11,000 more cases found by banks in tracker scandal

(Stock photo)
(Stock photo)
Charlie Weston

Charlie Weston

Pressure on banks from regulators has resulted in them finding thousands more tracker overcharging cases.

Banks are set to report today that they will now admit an additional 11,000 mortgage holders were wrongly denied the low-cost interest rate.

This is set to take the total number affected by the tracker scandal to around 30,000 - a rise of 130pc since September.

Refund cheques for the first 13,000 cases identified earlier this year are arriving in the post at the moment.

People affected are getting refund amounts of anything between €100 and €60,000, depending how much they were overcharged.

Banks have to restore those affected to a low tracker rate, refund them the overcharged interest and pay a percentage of the refund in compensation.

It is understood Finance Minister Paschal Donohoe will announce that refunds will be paid by the end of the year in the majority of the 13,000 cases identified in September.

It is understood that Central Bank director general, financial conduct, Derville Rowland is pushing the banks hard to own up to thousands of so-called disputed cases, where banks deny they did anything wrong.

The Central Bank, most of the banks and the Department of Finance are all due to release statements on the latest update on the tracker scandal today.

Many of the latest cases to be admitted to by the banks are for smaller amounts, as the most egregious cases have been dealt with already.

Regulators pressed 15 lenders to review their tracker books, but most of the cases relate to 11 lenders.

So far the lenders have put aside €800m to cover the cost of compensation and the lower interest they will earn by putting customers on low-cost trackers.

But the total cost to the lenders is now expected to top €1bn.

Mr Donohoe has insisted the total number of cases will not top 30,000.

But financial adviser Padraic Kissane estimates that the numbers affected will grow to 40,000.

Irish Independent

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