PTSB risks €30m compo

Permanent TSB could be hit with a compensation bill of up to €30m from an ongoing enforcement investigation being carried out by the Central Bank.

The matter relates to confusion over customer rights when changing mortgage products and specifically relates to customers who elected to switch back from a fixed rate homeloan to a tracker rate but weren’t aware such a right disappeared if they had first changed to a variable rate product.

Yesterday, PTSB withdrew appeals it had lodged with the Supreme Court (which were due to be heard on February 16) regarding an 18-month old High Court decision affirming two such customer complaints which had been upheld by the Financial Services Ombudsman.

A spokesperson for PTSB said the bank is reviewing how it had dealt with all cases of customers in similar positions. They added that upon review, any customers directly affected will be advised in writing if they are to receive redress.

The bank is also looking to review around 80 similar complaints which are on the books of the financial services ombudsman, but which the ombudsman hasn’t ruled on yet, given it was awaiting the outcome of the Supreme Court hearing later this month.

However, an industry source suggested last night up to 2,000 PTSB customers could be affected and could be in line for €10,000 to €15,000 in compensation. The outcome will be known when the Central Bank probe, which is expected to run for another three months, ends.

The financial services ombudsman said yesterday it welcomed the withdrawal of PTSB’s Supreme Court appeal and said the original High Court judgments in the original two cases “broadly endorsed the approach of the financial services ombudsman in these types of cases”.

“The financial services ombudsman will continue to adjudicate complaints on the basis of these standards and in the context of each individual complaint,” it added.