Update: AIB fined €83.3m for role in the tracker mortgage scandal

EBS, owned by AIB, was fined €13.4m for consumer protection breaches during the tracker mortgage scandal. Their combined fine brings the total sum to a combined €96.7m.
Update: AIB fined €83.3m for role in the tracker mortgage scandal

The Central Bank opened investigations six years ago into all lenders that sold the tracker home loans.

AIB was hit with a record fine of €83.3m for its role in the tracker mortgage scandal.

The bank was landed with the fine for a series of significant and long-running failings in the treatment of its tracker mortgage customers holding 10,015 mortgage accounts between August 2004 and March 2022. AIB has admitted to 57 separate regulatory breaches.

EBS, owned by AIB, was fined €13.4m for consumer protection breaches during the tracker mortgage scandal. Their combined fine brings the total sum to a combined €96.7m.

The Central Bank determined the appropriate fine to be €119m which was reduced by 30% to €83.3m in accordance with the settlement discount scheme provided for in the Central Bank. This will be paid to the Irish taxpayer.

The fine is separate from the more than €125m that AIB has been required to pay to date in redress, compensation and account balance adjustments to impacted customers, including as part of the Central Bank’s Tracker Mortgage Examination.

Last year, Ulster Bank was also fined almost €37.8m in what was the largest sanction by the Central Bank into wrongdoing by the banking industry in the tracker mortgage scandal.

The Central Bank opened investigations six years ago into all lenders that sold the tracker home loans.

In most cases, the investigations have shown that banks had acted in remarkably similar ways to deprive customers of their correct interest rates.

Many of the banks involved -- Permanent TSB, AIB, Bank of Ireland, Ulster Bank, and KBC Bank Ireland and their subsidiaries -- have either concluded their settlements with the Central Bank and have already paid out millions in compensation and restitution to customers or have set aside many millions to meet anticipated fines.

The first of the tracker mortgage fines imposed by the Central Bank was for €4.5m in late 2016 for Springboard Mortgages, a former subprime mortgage lender set up during the boom years by Permanent TSB but which it subsequently sold to a vulture fund. The fine was at the time the largest ever imposed by the regulator under its enforcement powers.

In May 2019, the Central Bank followed this up with a then-record fine of €21m for PTSB itself for its part in the industry-wide tracker mortgage probe. The elevated level of the fine reflected “the distressing and, in some instances, devastating consequences” of PTSB’s actions on its customers, the Central Bank said at the time.

In September last year, the Central Bank fined KBC Bank Ireland €18.3m and a scathing reprimand. At the start, KBC had insisted it could report only 93 overcharged accounts, while the investigation in the end unearthed 3,741 accounts, revealing a “deeply unsatisfactory” approach that had brought “devastating and avoidable” pain on its customers, according to the Central Bank.

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