Central Bank urged to intervene on trackers

Central Bank officials have been called on to intervene in the tracker mortgage rip-off scandal and force banks to properly compensate overcharged customers.

Dozens of customers lost their homes after banks wrongly hiked mortgage rates and lenders have been accused of being “tardy” in paying back customers.

Ulster Bank told an Oireachtas committee this week it has identified almost 3,500 customers affected by the tracker scandal. The crisis saw thousands of customers across different lenders wrongly charged different rates. Ulster Bank said that as few as 40% affected by the overcharging have been compensated.

Lenders including KBC, Bank of Ireland, AIB and PTSB have all appeared before the committee in recent weeks answering questions on the scandal.

Fianna Fáil’s Michael McGrath said yesterday that he thinks the Central Bank must intervene to hold banks to account, and ensure customers are repaid and take action: “Overall, the way they are handling the tracker issue is not acceptable, it is not satisfactory. Some are worse than others. We were completely stonewalled by KBC bank. Ulster Bank has been tardy to say the least in repaying people the money that they are owed.

“I think the Central Bank needs to step up its involvement. I think it is about time they [the Central Bank] flex their muscles, they use the powers they have and if they need more powers, then please ask the Oireachtas for more powers.”

The Department of Finance said last night that the Central Bank has powers to compel lenders to redress customers, but only dating to 2013 legislation.

It added: “The Central Bank does not have statutory powers to compel lenders in respect of failures that occurred prior to the introduction of the Act.

“However, the Central Bank has clearly articulated its expectations of lenders to provide appropriate redress and compensation to all impacted customers in line with prescribed Principles for Redress developed by the Central Bank.

“The timeframes for progression of the redress and compensation programmes vary from lender to lender, however the Central Bank remains focused on challenging lenders to ensure that they are progressing redress and compensation and that impacted customers are treated fairly.”

But Mr McGrath said talk was not good enough: “It’s just not good enough that people who are overcharged for six years or more and in some cases are still waiting to get their money back. And there has been no answer to the basic question: how is it that all of the banks happen to make the same mistake in a way which hurts their customers? The ball never seems to bounce the other way and if it does, it is corrected very quickly.”

“It is just not good enough. There will need to be graver and more decisive and assertive action from the Central Bank and I’m not satisfied with the redress and the compensation package because what they are actually doing is when they finally get around to it, they are paying back what you are overcharged with no interest. I never heard of it going the other way, where you pay back the bank a loan they gave to you but without interest.

“The compensation element in most cases has not been dealt with yet. This has put lives on hold and we have heard some of those cases. It has had a devastating impact on families. Not least for up to 100 cases where people lost their family home.”

Editorial: 14

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