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Monday 22 January 2018

AIB threat to 60c debt customer

Watchdog calls bank 'heavy-handed' after heart patient misses loan payment

Charlie Weston Personal Finance Editor

A LEADING bank threatened to close a customer's account after they were overdrawn by just 60c and missed one loan repayment.

AIB was accused of being "heavy-handed" after it also threatened to put a black mark on the customer's credit record and dip into their savings.

The bank, which has received €20bn in taxpayer funds, also threatened to withdraw the consumer's debit card after the account holder missed one €94 repayment on a loan.

Consumer watchdogs said banks were now treating anyone who gets into arrears in an aggressive fashion.

The bank insists that letters of this nature would only be sent after a series of earlier contacts with the customer. However, in this case the customer insists that there were no previous letters or phone calls.

The customer said that just one missed repayment and an overdraft of 60c should not have prompted this type of letter.

The customer, who is known to this newspaper, is of 30 years standing with AIB and missed the payment while in hospital with a heart condition.

This led to his current account ending up with an unauthorised overdrawn amount of 60c, prompting AIB to write to him to terminate his bank accounts and overdraft facility within 30 days.

The bank also said it would cancel his combined ATM and debit card.

"Your standing orders and direct debits will be cancelled. Your AIB phone and internet banking facilities will terminate," the letter states.

And the bank told the consumer his failure to meet his agreements would mean it would report him to the Irish Credit Bureau.

"Any money standing to the credit of any of your accounts will be taken by the bank and set off against what you owe on your other account(s)," the letter added.

The letter also states that unauthorised overdrafts will have a surcharge of 12pc applied to them and charges of €5.15 up to five times a day will apply.

The customer insisted this was the first communication he received about the missed loan repayment and unauthorised overdraft, and is adamant that there were no phone calls made to him. The revelation comes after State-owned AIB warned that it would be increasing consumer charges.

Last week, AIB executive chairman David Hodgkinson said that banks must charge more for credit if they are to achieve commercial viability.

Director of the Free Legal Advice Centres (FLAC) Noeline Blackwell said her organisation was encountering thousands of people subjected to high-pressure debt collection techniques from banks and other lenders.

She said she was concerned that a large bank was acting in such an insensitive way without first finding out the reasons for the non-payment of the loan.

Chairman of the lobby group the Consumers Association, Michael Kilcoyne, accused banks of acting in a heavy-handed way.

"Banks are getting nasty with people. The Central Bank needs to get tough with them. They are holding the country to ransom and preventing a recovery," he said.

AIB, which was shown the letter with the customer's name blacked out, defended its actions and insisted it only sends letters threatening to close accounts and report people to the Irish Credit Bureau if they fail to respond to previous letters or phone calls.

"The communication process concerning arrears involves at least three letters from the bank to the customer. If the customer consents to phone contact, it will also entail at least two phone calls.

"The letter you refer to is sent at the end of that process, which takes a number of months, and only where arrears have not been paid and there has been no engagement by the customer with the bank," the spokesman said.

It said it was now anxious to engage directly with the customer with "sensitivity and understanding".

Irish Independent

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