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Sunday 18 August 2019

Tracker scandal: 99 people lost their homes with 40,100 mortgage accounts impacted

Mortgage application
Mortgage application
Charlie Weston

Charlie Weston

The final report into the tracker scandal has found that 99 people lost their homes due to the scandal.

Another 216 buy-to-let properties were lost due to the failures of the banks.

The Central Bank probe into the tracker scandal has concluded that 40,100 mortgage accounts were impacted.

This is despite experts saying there are thousands more impacted by the scandal.

A total of €683m has been paid out by banks to homeowners impacted by the loss of trackers.

People who lost their homes got some of the highest payments to compensate them for the loss of the properties.

Higher property values would have been included in the payments made.

Loss of a residential property meant average redress and compensation of €194,000.

In one illustrative cases study, outlined by the Central Bank, a man who lost his home due to his bank’s failure to offer him a tracker rate was offered €216,000 in redress and compensation by the lender.

The case study is not based on one actual case, but has been put together based on several actual cases.

The payment was made up of redress, which is a refund of the money he was overcharged, and compensation of €216,200, according to the case study.

The Central Bank said the overall payment includes a payment to reflect the increase in property value since he sold his home.

His lender also wrote off his residual debt and offered a new mortgage on a tracker rate of set at 0.85pc over the European Central Bank rate.

This is the rate he would have been on if this failing had not occurred, according to the case study.

Five main lenders – AIB (which includes EBS), Bank of Ireland, KBC Bank, Permanent TSB and Ulster Bank – account for 98pc of the cases so far redressed.

The total gone up by just 300 since the end of May.

The Central Bank said it forced lenders to own up to an extra 20,000 cases.

Most people impacted lost a tracker after fixing for a period.

Others were put on the wrong tracker rate margin.

The majority of customers impacted by the tracker scandal got a payment of €10,000. But some 830 customers got a payment of more than €100,000.

And regulators said their enforcement actions “are considering the actions of individuals which may be relevant to establishing how and why customers lost their trackers”.

The probe has exposed “a lack of a consumer-focused culture in lenders”, according to the Central Bank’s final report into the debacle.

“While lenders publicly state they put their customers first, the evidence from the examination suggests otherwise.”

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

Although the regulator is 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.

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