Bank to pay back €35m as probe confirms massive overcharging

ALLIED IRISH BANK will pay €35 million to customers after an investigation yesterday confirmed massive overcharging.

The probe by the Irish Financial Services Regulatory Authority found the country’s biggest bank had overcharged customers in a number of areas, including at its foreign exchange. The payout includes €25.6 million relating to foreign exchange charges, €0.5 million in other notification breaches and €8.1 million in other charging cases.

Bank chairman Dermot Gleeson defended the bank over the foreign exchange issue.

The bank was not guilty of overcharging on its foreign exchange rates, he said.

“It has emerged from the investigation that the rates charged by AIB were generally comparable with the rates notified by its competitors.

“AIB was negligent in its failure to notify the authorities that the rates it had notified to it were not the ones it had charged customers,” he said.

There was no overcharging and AIB did not owe their foreign exchange client base any money, he said. AIB chief executive Michael Buckley, who previously refused to appear before the Dáil’s Public Account Committee, which was investigating the overcharging scandal, expressed his sincere apologies to the bank’s customers.

He said the bank had been “tearing up the floorboards” to uncover any irregularities that existed.

“We will take whatever disciplinary action is appropriate (when the final IFSRA report is released).” The AIB board reaffirmed its full support for Mr Buckley, who is due to retire in 2006. But it said that candidates from outside the company would be interviewed to replace him, contrary to the previous practice of only selecting from within AIB.

The Revenue Commissioners is continuing an investigation into former senior AIB staff who allegedly evaded tax through offshore investment schemes.