Tuesday 11 December 2018

Number of people affected by tracker mortgage scandal has more than doubled in past three months

(Stock photo)
(Stock photo)
Charlie Weston

Charlie Weston

THE number of people affected by the tracker mortgage scandal has more than doubled in the past three months.

The latest figures from the Central Bank show that 33,700 mortgage accounts have been affected by what is emerging as the largest overcharging scam in the history of the State.

Banks have owned up to an additional 13,600 cases since the last update for those impacted was issued by the Central Bank in September.

And there are indications from official sources that the numbers are set to grow.

Almost €300m has been paid out in refunds of overcharged interest and compensation to mortgage holders denied the use of money that should never have been taken from them.

Governor of Central Bank Philip Lane reacted to the latest surge in the number of cases by slating banks he regulates, saying that they failed to put the customers first.

“The Central Bank recognises the devastating effects that lenders’ failures have had on families and individuals.

“That is why we’re using all our powers to force the banks into line and ensure all affected customers are included for redress and compensation,” Prof Lane said.

Read More: 11,000 more cases found by banks in tracker scandal

And he warned that his office was pursing enforcement actions against the banks that denied their customers a good-value tracker rate, or put them on the wrong tracker margin, or failed to warn them of the implications of opting out of a tracker contract.

Tracker interest rates are a fraction of those charged on variables or fixed rates. This means that people affected by the tracker scam, who get back a tracker rate, are seeing monthly payments typically fall by €300.

And average refunds and compensation amounts are around €25,000 due to customers being overcharged for years.

The extra 13,600 cases emerged after robust challenges were made to the banks by Central Bank director general, financial conduct, Derville Rowland.

It is understood the tough talks on disputed cases were conducted at the level of bank chief executives and chairman, who were called into the Central Bank.

Read More:  AIB not expecting 'material' changes to tracker mortgage provision

Ms Rowland said in a statement that there has been huge resistance among the banks to restoring tracker mortgages.

“Many of the banks put up barriers by relying on legalistic approaches and narrow interpretations of contracts.

“We relentlessly pursued them in order to force them into doing the right thing by their customers.”

She said the Central Bank’s view is that the vast majority of customers have now been identified and included for redress and compensation. 

But it is expected that more cases will emerge in the coming months.

Online Editors

Business Newsletter

Read the leading stories from the world of Business.

Also in Business