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Wednesday 26 September 2018

Family sank into debt after being overcharged by Ulster Bank in 'completely appalling' case

Family with two children suffering from Asperger’s syndrome sank into debt after being overcharged by Ulster Bank

Ulster Bank CEO Gerry Mallon
Ulster Bank CEO Gerry Mallon

Gretchen Friemann

A family with two children suffering from Asperger's syndrome sank deeper into debt and reduced spending on food and heating after they were overcharged by Ulster Bank for their tracker mortgage.

The family claim they are owed close to €30,000 by the UK-owned lender after it piled an extra €400 on to their monthly home repayments over a seven-year period.

Ulster Bank's chief executive Gerry Mallon described the case as "completely appalling and not at all unique".

Like the vast majority of the 3,500 customers wrongly charged or denied a tracker rate, the family claim they have yet to receive any redress or compensation.

John McGuinness, chairman of the Oireachtas Committee on Finance, Public Expenditure and Reform, yesterday relayed the family's allegations to Ulster Bank's senior management and described the lender's handling of the tracker scandal as "appalling".

He said in this instance the bank's error had forced the family to take out loans from other banks and credit unions to support the care of "those two children".

Mr Mallon replied "it pains us to see customers in that kind of situation as a direct consequence of the actions of the bank." But he pledged to "make it right for those customers" and acknowledged there was "more work for us to do in being helpful and transparent".

Yet despite the fulsome mea culpa, Mr Mallon was unable to clarify when and how much the bank will pay in compensation.

Ulster Bank, a subsidiary of RBS, has set aside €206m to cover the cost of its redress scheme and the fees associated with its tracker mortgage investigations. But Mr Mallon warned it will be "well into 2018" before all cases are addressed. He revealed that fewer than 14 customers had lost their homes as a result of the debacle - lower than first estimated - but said the number may rise.

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An initial €50,000 has been paid to these people, all of whom had their homes sold by the bank. This figure may exceed €100,000 according to Paul Stanley, Ulster Bank's chief financial officer, although he declined to state the maximum of redress and compensation on offer.

In a bruising encounter with the Oireachtas Committee, Ulster lender's senior management were accused of dragging their heels. All five of the State's banks have been caught up in the saga, with Bank of Ireland and Belgian-owned KBC the only two yet to start paying compensation to affected customers.

Ulster Bank revealed the number of customers overcharged now stands at 3,500 - from an earlier estimate of 2,000 - but acknowledged that so far just 40 had received any compensation.

While Mr Mallon, who took over the reins in July 2016, repeatedly apologised for the lender's handling of the matter, he said 200 staff are working on resolving what is a "complex" and time-consuming problem.

Fianna Fáil's Mr McGuinness who claimed correspondence to the committee "is telling us that your helpline is a farce, that it doesn't give answers or any comfort on any timeframe in dealing with the issue - or whether they are in scope or not." He claimed the level of "information is such that it's unhelpful and it adds to the anger of the people who get in touch with the helpline in the first place."

Irish Independent

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