Saturday 17 August 2019

Tracker total set to rise over 40,000 cases and cost €1bn

Disputing cases: PTSB boss Jeremy Masding
Disputing cases: PTSB boss Jeremy Masding
Charlie Weston

Charlie Weston

The Central Bank is due to issue its final report into the tracker scandal.

The report into the largest banking scandal to hit the country is expected to conclude the total number of mortgage accounts affected tops 40,000.

Banks have spent more than €1bn between them rectifying the scandal which has been described as a huge rip-off.

Although the regulator has finished its supervisory work on 15 different lenders, it is continuing enforcement work.

Two months ago, the largest fine ever imposed by the Central Bank was given to Permanent TSB for regulatory breaches that affected thousands of tracker customers.

The regulator has reprimanded and fined Permanent TSB €21m.

It said this was due to "serious failings to 2,007 tracker mortgage customer accounts which were affected for the period between August 2004 and October 2018".

The debacle caused 12 families to lose their homes, and 19 buys-to-let were repossessed as a result of the scandal.

The Central Bank said Permanent TSB did unacceptable harm to its tracker mortgage customers.

Five other banks are now facing fines. They are AIB (including EBS), Bank of Ireland, Ulster Bank and KBC Ireland.

In some cases, banks incorrectly interpreted legal or contractual terms and conditions, denying some customers their right to a tracker.

Banks also failed to warn customers of the consequences of coming off their tracker mortgage to opt for a fixed rate for a period. These people were told at the end of the fixed period that they could not get back on their good-value tracker.

Mortgage lenders had paid out €647m in refunds and compensation by last February to customers caught up in the scandal, which goes back more than a decade.

This figure is expected to have climbed when the final report into the tracker scandal is published by the Central Bank.

Last February's update from the Central Bank said some 39,800 mortgage accounts were identified as being affected by the tracker denial issue. That number is set to climb to more than 40,000.

But it is not expected that 200 cases of staff and former staff at Bank of Ireland will be included in the final total. There is also a dispute around 5,900 AIB customers who received €1,615 last year for the bank's failure to offer them a tracker when their fixed rate expired.

And Permanent TSB, run by Jeremy Masding, insists its tracker probe is complete despite claims there 2,500 more cases yet to be resolved.

Irish Independent

Also in Business