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€120m paid out by banks over tracker mortgage scandal

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€120m paid out by banks over tracker mortgage scandal

€120m paid out by banks over tracker mortgage scandal
April 05
09:00 2017

Governor of the Central Bank Philip Lane has told the Oireachtas finance committee that Irish banks have paid out more than €120 million in the past two years in redress and compensation to mortgage customers who were denied a tracker rate. This comprised €78 million paid to 2,600 customers by the end of February as part of its current industry-wide examination that it ordered at the end of 2015.

It also includes €36.8 million and €5.8 million in redress and compensation that has been paid by Permanent TSB and its former mortgage subsidiary Springboard Mortgages Ltd in respect of 1,374 accounts affected as part of a redress programme that the lender announced in July 2015.

The Central Bank recently said that approximately 9,900 customer accounts had been identified as affected by lenders as part of its tracker mortgage examination. 90% of accounts have had the rates rectified with redress and compensation paid in 25% of instances. Some customers lost their homes as a result of not being offered the correct tracker rate.

The governor also said it was clear that lenders had “failed their customers” by denying them tracker rates. Some 7,100 tracker cases were resolved before its current examination process began. The governor said there was a systemic and widespread aspect to this issue that “manifested itself in different ways across lenders”. At its heart, was a culture in interpreting contracts whereby banks favoured themselves rather than the customer, he added.

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