Wednesday 18 July 2018

KBC Bank admits 33 properties were lost due to the tracker scandal

Wim Verbraeken heads up the Belgian-owned KBC bank
Wim Verbraeken heads up the Belgian-owned KBC bank
Charlie Weston

Charlie Weston

KBC Bank has admitted that 33 properties were lost due to the tracker scandal. This is the highest number of any bank.

The bank is before the Oireachtas Finance Committee on Tuesday and is set to tell it that six family homes were lost along with 27 buy-to-let investment properties.

Bank bosses have warned the number of properties lost over the denial of a tracker rate is set to rise, in a questionnaire prepared for the committee.

"As we progress through the remaining cases for redress and compensation we expect this number will increase," the document states.

The Belgian-owned bank, which is headed up here by Wim Verbraeken, will disclose that almost 3,000 customers have been affected by the tracker issue, the Irish Independent has learned.

The loss of 33 properties for KBC Bank customers is twice the number at far-bigger rivals Bank of Ireland and AIB.

Some 15 homeowners have suffered the loss of their house due to AIB denying them a tracker rate, while Bank of Ireland said this week that 14 properties were taken off customers, with eight of these owner-occupier properties.

Permanent TSB has said in the past that 31 customers lost properties, with less than half owner-occupier properties.

The Central Bank said recently that 37 owner occupiers lost homes due to the tracker overcharging scam, with 79 buy-to-let properties lost.

In details given to the Oireachtas Committee ahead of its appearance, KBC also reveals that just 501 of the affected customers have received refunds and compensation, as well as being put back on the lower tracker rate. This represents just 16pc of its tracker customers who were affected.

This means that KBC is one of the slowest of the 15 lenders that are probing the tracker overcharging issue.

TDs have heavily criticised the bank in the past for the slow pace of its remediation process, and its failure to provide them with details of customers who were affected.

Fianna Fáil's Michael McGrath complained that KBC had "completely stonewalled" the committee when it last appeared before it. He accused it of taking the same approach with the Central Bank.

At the end of last year it emerged that the Central Bank is taking enforcement action against KBC over its tracker mortgage failings.

Law changes in 2013 doubled the maximum monetary penalty the regulator can impose on a financial firm for rule breaches, from €5m to €10m, or 10pc of turnover, and for individuals from €500,000 to €1m.

However, sources said that any potential rule violations are likely to have occurred before the thresholds were raised.

The bank also discloses that 571 tracker cases were settled before the Central Bank called for an industry-wide tracker review at the end of 2015.

Average refund amounts are €42,000 for being overcharged interest, with another €21,000 paid on average to the 500 customers who have had cases redressed so far.

The bank is set to reveal that 56 customers are in dispute with it as it is denying they have a case for tracker redress.

Some 14 tracker files are missing, the bank has told TDs and senators on the committee.

The questionnaire reveals that no internal investigation is being held to work out why so many customers lost trackers.

In total, some 34,000 mortgage holders lost trackers across 15 lenders, in what is set to cost the lenders €1bn.

Irish Independent

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