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Tuesday 17 July 2018

Ulster Bank to come in for criticism on handling of tracker scandal

Ulster Bank will appear before the Oireachtas Finance CommitteePhoto: PA
Ulster Bank will appear before the Oireachtas Finance CommitteePhoto: PA
Charlie Weston

Charlie Weston

Ulster Bank is set to come under fire from politicians over its slow handling of the tracker overcharging scandal.

The bank is due to tell the Oireachtas Finance Committee that the overcharging led to 15 families losing their homes.

And the bank has still not moved from its figure of 3,500 customers who either lost a tracker or were on the wrong rate, even though there are indications the number could double.

TDs and senators are set to be warned that it could emerge that more owner occupier homes were lost due directly to the tracker scandal.

Outgoing Ulster Bank chief executive Gerry Mallon will insist that the lender is prioritising the identification and payment of redress and compensation to customers who lost homes.

The bank has come in for severe criticism from politicians on the committee at previous hearings this year for the slow progress it is making identifying affected customers.

Finance Minister Paschal Donohoe last week told the committee it was his understanding that IT issues were behind the Ulster Bank tardiness in dealing with the redress process.

The bank had tried to delay its appearance before the committee until the end of February, arguing that it was limited in what it could say until it issues financial results.

Mr Mallon is due to tell the TDs that bank is still working to identify any additional mortgage holders either wrongly denied a tracker, put on the wrong rate, or not given sufficient warning that they could lose the tracker rate if they opted for a fixed rate.

The bank has had up to 200 people working on the tracker probe.

Ulster Bank will say that it has returned 2,500 customers to the correct rate. It has paid compensation to 1,017 customers, according to a questionnaire filled out by the bank for the politicians ahead of the Oireachtas Committee hearing.

Mr Mallon will issue an unreserved apology for the failures.

The questionnaire also asks Ulster Bank if it has identified which staff members or directors where behind the denial of trackers to customers. The bank would not comment and said the issue was subject of a Central Bank investigation, the questionnaire makes clear.

The questionnaire shows that tracker mortgages account for two thirds of the Ulster Bank mortgage book, worth €11.2bn.

Trackers had been loss-making for bank because customers were paying a lower interest rate than banks were being charged.

The cost of trackers is suspected to be one of the main reasons banks wrongly moved customers from the mortgages. 

So far AIB has admitted that 14 home owners lost their properties, while Bank of Ireland said eight customers lost homes.

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