AIB overcharging ‘not systematic’

THE latest AIB overcharging scandal is not “systematic”, according to a reliable source.

It is thought the scandal is confined to a small number of branches believed to be less than 10 overall.

The last time the bank was investigated, it paid out over €34 million to compensate customers who had been overcharged for foreign exchange transactions.

But this latest query is confined to activities and decisions taken within individual branches, it is understood.

The investigation has been going on since the Financial Regulator completed his last investigation that found the bank guilty of a systematic cover up over the overcharging debacle.

At the time, Liam O’Reilly said the bank had several opportunities when it could have alerted the regulator to the overcharging on foreign exchange but declined to take them. A spokesman for the Financial Regulator said he has been on the case since the initial investigation found the bank guilty of widespread overcharging and of a cover up. AIB was not fined because the regulator had no powers to do so.

The bank cannot be fined for this latest case either because power to impose fines was only granted on August 1, 2004. The latest investigation goes back farther than that so the regulator has no authority under law to impose a fine, a spokesman confirmed yesterday.

While a whistle blower came forward to highlight this latest overcharging practice, it is understood the regulator had been on the case for some time before that.

So far the investigation suggests the number of branches is quite small and that the offences were the result of individual decisions within certain branches and not a coordinated effort by the bank as a whole.

Neither side has been able to say how many branches are involved or the extent of the cover up but the regulator said the scale is much smaller.

This latest investigation raises concerns once more that this is only a tip of the iceberg and many suspected that overcharging was rife in the bank during the 1980s and 1990s. The bank has said the current investigation is nothing like the magnitude of the previous investigation and that the overcharging was being thoroughly investigated in conjunction with the Financial Regulator.

“Nothing approaching the magnitude of the FX charging issue of 2004 has been identified. AIB thoroughly investigates any potential issues identified as part of these processes and ensures that any such investigation is carried out in a manner which is fair to all concerned,” the statement added.