Opinion: A woeful history of ‘screw the customer’

THIS little country has put itself and future generations into hock to save the banks.

They owe us, and while it is hard for them to lendvast amounts, they could at least treat their benefactors with respect.

We need a functioning banking system, but do we really have to keep some of the banks that have blackguarded this State and its citizens for generations?

One bank, Allied Irish Banks (AIB), has a woeful history. Its record leaves one with the impression that this country would be better-off without it and the pernicious culture it inures in many of those who have the misfortune to be employed by it.

Some of the finest people in Ireland work with AIB at all levels. However, it is the culture of cuteness and screw the customer that wins out almost every time.

The bank has a culture which has enabled it to rip-off its customers for decades. Insiders are well aware of this culture. The depths to which it is imbedded in the bank has saved it from being caught out on many occasions.

Let me explain how AIB’s nefarious ways work. Some years ago AIB top brass needed margins to be increased and a branch level hiking of rates on all loans and charges was ordered.

It was left to those at local level to devise how the extra charges were imposed. This resulted in an ad hoc raising of margins which made it impossible to detect. The bottom line was the margins went up by the required amount; the how was left to those on the ground.

Some years afterwards the bank realised they had a problem with overcharging on loans and overdrafts. They worried that it could be shown to be systematic.

They felt they were screwed and ordered an audit. No pattern could be found by the outside consultants. The bankers were delighted and decided there was in effect no problem as none could be detected.

This is not to say that AIB have not been caught out on many occasions. There was the Insurance Corporation of Ireland bailout. There were the Bogus Non-Resident Accounts debacle which helped customers avoid deposit interest retention tax. The bank made millions by giving the bogus account holders a lower margin of interest than it gave to legitimate account holders. There have been other cases of overcharging found to be systematic and for which some reparations have been made.

Now the bank’s fall-back defence appears to be back in play.

AIB has a massive problem with poorly secured loans on property where the paperwork does not give the bank a proper charge on properties on which they advanced millions of euro.

The solution appears to be: Let the lads on the front line sort it out.

Last January, the Irish Examiner highlighted a case where it appears that forged loan documents, generated by the bank, materialised to give AIB a claim on the property of a couple living in Munster.

This forged document even had the couple’s signatures and altered dates and conditions. Luckily the couple had copies of their original agreement and could show the bank’s documents had been forged. The bank said it could offer no explanation to where the fraudulent documents came from.

In January the bank opened an investigation. Now, more that six months on, all a bank spokesperson said this week, was: "The investigation is ongoing, so I can’t comment."

Amazingly, every month AIB writes to them telling them they can make a complaint to the Financial Services Ombudsman (FSO).

If the couple do, details of the scam will never come to light as the FSO cannot name and shame banks who deceive and defraud their customers.

The truth will come out in the end; it would be nice, for once, to hear it from AIB first.