Monday 19 February 2018

Permanent TSB set to make €35m mortgage settlement

Jeremy Masding, Group Chief Executive, Permanent TSB
Jeremy Masding, Group Chief Executive, Permanent TSB
Sarah McCabe

Sarah McCabe

Permanent TSB will this week agree to pay €35m to settle disputes with around 2,000 customers over mishandled mortgages, it is understood.

The lender, which is run by Jeremy Masding, has agreed to pay an average of €20,000 to each of the customers.

The bill relates to a mortgage error that began five years ago, when the bank refused to allow customers to switch to tracker mortgage products they had lost as a result of an IT glitch.

Some tracker mortgage customers had moved to fixed- rate contracts with the promise that they could revert back to trackers after a set period.

Then a glitch in Permanent TSB's IT system allowed some of these customers to escape their fixed-rate contracts early, at a time when interest rates were falling, without penalty.

The bank later refused to let them move back to trackers.

Four customers took cases to the Financial Services Ombudsman, which found in their favour.

The Ombudsman ruled that the bank had not made it clear to customers that leaving their fixed rate early would result in the loss of their tracker rate.

Permanent TSB appealed this decision to the High Court, lost in 2012, and then took the unusual decision to appeal to the Supreme Court - but dropped the appeal in February after three years.

The Central Bank is taking enforcement action against the lender on the matter which has culminated in the compensation figure now agreed upon.

Staff from the Regulator have been in constant contact with bank officials on the issue in recent months, it is understood.

Sunday Indo Business

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