Ulster Bank has some of the lowest fixed mortgage rates while Permanent TSB has the highest mortgage rates for existing customers.
This has prompted Brendan Burgess to call on the competition watchdog to impose conditions that would ensure new and existing customers of Permanent TSB can avail of the same mortgage rates after the takeover.
The founder of Askaboutmoney.com said the takeover should be approved by the Competition and Consumer Protection Commission but he said there should be conditions imposed.
He claimed: “Permanent TSB has a long record of treating customers very badly. This culture has not changed and this exploitation of customers continues right up to the present day.”
In a submission to the competition body he claims the gap in the rates charged between Permanent TSB and Ulster is so wide an Ulster Bank customer could end up paying up to €30,000 more in interest to Permanent over the life of their mortgage.
Permanent TSB is seeking approval from the State’s competition watchdog to take over €7bn of mortgages and business loans from Ulster Bank, which is leaving the market.
It would also take over 25 of Ulster Bank’s 88 branches.
Mr Burgess said Ulster Bank offers the same rates to new and existing customers.
But Permanent TSB does not allow existing customers avail of the cashback or lower rates used to attract new customers.
He said the lowest rate for existing Ulster Bank customers is 2.2pc compared with 2.95pc for Permanent TSB customers.
Mr Burgess told the Competition and Consumer Protection Commission in a submission the acquisition should be allowed to proceed.
But existing Ulster Bank (UB) customers must be protected from “exploitative behaviour of Permanent TSB” by conditions being attached to the deal.
He wants a commitment by Permanent TSB to offer the same rates to new and existing customers.
Mr Burgess also wants the competition body to ensure the lender discontinues its cashback offers and competes for new business on mortgage rates alone.
And he wants the competition body to ensure Permanent TSB sets up a separate unit for former UB customers.
Asked about Mr Burgess’s submission, Permanent TSB said its goal is to “create a strong, competitive force in the banking sector that provides further competition for customers”.
“We look forward to welcoming Ulster Bank customers to Permanent TSB and we can assure these customers that they will be offered competitive products and services, served by a nationwide branch network and a leading digital offering.”
Permanent TSB said it had notified the proposed acquisition to the CCPC and it will engage fully in that process.
While that process is on-going, it said it was not appropriate to comment on any individual submissions that may be made to the CCPC.