PTSB directors apologise for bank failures

Three senior managers at Permanent TSB yesterday apologised for the failures of the bank in not informing customers about their mortgage rights.

Chief executive Jeremy Masding, chairman Alan Cook, and Niall O’Grady, the director of transactional banking, revealed that at least 22 customers had either lost their homes or investment property because of wrong-headed actions taken by the bank.

Mr Masding said the bank had found no evidence that the failures were as a result of a deliberate policy or that customers were mis-sold products or had been overcharged.

He said the failures included not informing the customer fully and not applying the correct mortgage rates.

The group said 1,372 customers were affected across PTSB and its Springboard Mortgages unit because the bank had wrongly informed them about their rights under their contracts when they had requested changes to their mortgages between 2006 and 2011.

The bank charged higher mortgage payments which potentially opened up customers to risks of going into arrears and legal proceedings.

PTSB launched tracker mortgages in 2004. It said some customers had the right to move to tracker rates from fixed rates when the fixed-rate period ended.

“Many customers” contacted the bank early — as they were entitled to do — seeking to break from the fixed rate and many were transferred to standard variable rates instead. They lost their right to return to a tracker mortgage rate subsequently.

In its Springboard unit, PTSB said customers were not put on a tracker at all or were given the wrong tracker rate when their fixed-interest rate period ended. Customers remained on the standard higher variable rate.

The bank revealed that 61 customer accounts involved a loss of properties. Of those, the bank said there was a good chance that at least 22 customer accounts had lost their properties because of the bank’s actions.

The new management came into the rescued bank over three years ago. PTSB, however, continued to fight a small group of customers through the High Court and the Supreme Court.

In June 2014, PTSB received a so-called enforcement letter from the Central Bank about the cases. Mr Masding yesterday told a media conference that the regulator’s letter had caused the bank to rethink its approach.

Because of the enforcement order, it started a “scoping study” to find out how many customers it had wronged and to assess how much it should pay in compensation and redress.

The bank had put aside €112m to meet “legacy and compliance issues”. It could face a total bill of only €70m, which may include a Central Bank fine of up to €10m.

It is understood PTSB only ended all legal proceedings against customers in February. At least one of those customers “voluntarily surrendered” a property in recent months.