EAMON QUINN: Tracker scandal may ensnare ‘up to 30,000’

As many as 30,000 customers could have been overcharged by banks for their tracker mortgages and the costs of provisioning set aside by banks will inevitably rise, according to the financial adviser who first uncovered the scandal.

Padraic Kissane said there was good reason to believe that the investigation supervised by the Central Bank will find that at least 20,000 customers and as many 30,000 will be found to have been charged too much or put on the wrong tracker rate.

After winning the cases for two customers eight years ago, Mr Kissane went on to identify there was a wider problem involving.

His assessment comes as the Central Bank in its latest update on the investigation sharply increased its warnings to banks.

It said that since its previous report in March, it had engaged with gardaí and the Competition and Consumer Protection Commission.

It said 13,000 cases of wronged tracker customers had so far been detected.

Lenders have acknowledged that 23 private homes and 79 buy to let properties had been seized “as a result of their failings”. “The Central Bank will rigorously pursue its enforcement investigations,” it said.

After taking so-called enforcement investigations against Permanent TSB and Ulster Bank, it said it was planning two further investigations and anticipates “that more enforcement investigations will follow”.

And the Central Bank said that it had challenged two lenders who it was not totally assured had detected groups of their customers who were affected by the banks’ “failures”.

“As a result of the Central Bank’s challenges, the two lenders are considering certain outcomes from their reviews and are due to revert to the Central Bank by the end of October 2017. As the Central Bank progresses its assurance work, other lenders will be similarly challenged,” it said.

The 13,000 affected cases detected so far was up from 9,900 cases at the time of its last update in March.

The number of accounts to which the proper rates have been rectified has risen to 7,700 customers from 6,300 in the previous report.

The number of accounts that have received redress and compensation has risen to 3,300 from 2,600 since the earlier report.

And the amount of redress and compensation paid out has risen to €120m from €78m.

Mr Kissane said he had given a vote of confidence to the Central Bank’s investigation from the start and said that some of his comments on the examination had been taken aboard.

“There are a lot of warnings to banks,” in the latest report, he said.

At least 20,000 customers and as many as 30,000 customers could be affected because “there is a whole host of cohorts in each lender” including bank staff who have not been redressed,” he said.

Since July 2015, the Central Bank said customers had received €163m in redress and compensation.

Mr Kissane said the final total could reach €500m and that lenders will have to increase their provisioning as a result.

“It was made complicated by the banks. It was made complicated by the banks purposefully I might add.

“It is a very straightforward exercise. You are or you aren’t entitled to your tracker rate, and I can tell them in five minutes,” he said.


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