Scandal focus on 4,000 tracker cases

By Eamon Quinn

The financial adviser who did the hard spade work from 2009 uncovering the industry-wide tracker mortgage scandal says the tally of wronged customers will reach over 40,000 but that only a fraction of the €1bn-plus cost will go to wronged customers.

Padraic Kissane also believes that 4,000 AIB customers who, with the agreement of the Central Bank, have received small amounts of payments should receive full redress, without the need for them to pursue cases through the High Court.

It comes as the Central Bank in its latest update confirmed its so-called enforcement procedures have been evoked against all the mortgage lenders, Permanent TSB, Ulster Bank, Bank of Ireland, KBC, AIB and its lender EBS. That gives the regulator additional powers to investigate the individual lenders over the matter.

It said it had so far identified 37,100 wronged customers, an increase of 3,400 since the end of the year, and €459m had so far been paid out. About 12% of the people who have been so far identified as due compensation will be paid by the end of June, the regulator said.

Speaking to reporters at the AIB annual shareholders’ meeting, chief executive Bernard Byrne said the group of 4,000 AIB customers were included in December at the insistence of the Central Bank and have the right to argue their case legally because the rates they were offered did not lead to losses and were not detrimental to customers.

But Mr Kissane said it was not up to AIB retrospectively to decide what prevailing rate almost 10 years ago should apply. He said the group of 4,000 customers were not all on the same contracts but that he and other representatives should be open to talking on their behalf with senior AIB managers “to thrash it out”, or for AIB to fund fully the cases through the High Court.

Asked if he was disappointed by the Central Bank’s position over the 4,000 customers, Mr Kissane said the regulator appeared to have allowed AIB to dictate retrospectively the rate that should apply.

Mr Kissane said he believed the banks all faced the same issue at the time tracker mortgages were withdrawn from the market but he said they did not collude over the matter. But he said some banks were the worst offenders in denying the scale of the overcharging.

The Central Bank’s head of financial conduct, Derville Rowland, said that “consumers who receive a payment from their bank can cash their cheque safe in the knowledge that they can still appeal the amount they have been awarded”.

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