Bank of Ireland owes tracker customer €481k

Bank of Ireland owes almost €500,000 in compensation and refunds to a customer wrongly charged over the tracker mortgage scandal.

New figures drill down into the redress and compensation owed to customers and some 9,400 accounts ripped-off by the lender.

The bank has identified a buy-to-let case where the owner must be paid €481,000. This relates to being wrongly charged from 2011 to 2017. The customer will get €416,000 in returned interest while remaining amounts include compensation.

The tracker mortgage scandal has resulted in some people losing their homes after they were taken off tracker mortgages or denied low rates. As mortgage payments went up, many households also experienced stress, mental trauma, and family problems.

Bank of Ireland has identified 9,400 customers affected. Some 6,000 of these were only recently added to its list after political pressure and challenges from the Central Bank late last year. These were eventually added in November.

Of the 9,400 customers, 3,400 were on an incorrect tracker rate, while 6,000 were denied a tracker rate.

Further details supplied by the bank to the Oireachtas Finance Committee, which has been investigating the overcharging, show the huge sums now faced by the lender in redress.

In another owner-occupied case, the bank owes the borrower €393,000, most of which relates to refunding interest payments.

Overall, four customers were paid an average of €407,000 in refunds and compensation, 10 received an average of €162,000, 49 customers were paid €119,000 while another 79 borrowers were entitled to €84,000, the figures show.

The bank overall identified during its tracker mortgage examination that there were 142 mortgage accounts where compensation and redress payments of over €100,000 were due.

Previous correspondence to the finance committee shows Ulster Bank owed 11 of its customers payments of over €100,000 each while AIB owed 14 of its overcharged customers an average payout of €144,000.

The Central Bank has indicated that 33,700 customers have been affected by the mortgage scandal, which it is estimated could cost the banks some €1bn in refunds and compensation.

Despite the negative publicity and ongoing efforts by TDs and senators on the finance committee, banks are still shirking from their responsibility on paying back wronged customers.

The Central Bank has expressed its exasperation with banks, and has hinted at imposing fines and clawing back the pay of top bank chiefs if they fail to come into line following their handling of the scandal.

Derville Rowland, the director general of financial conduct at the Central Bank, has also called in colleagues from the Dutch central bank to conduct an audit on the “behaviour and culture” of five Irish banks and will weigh bringing in tougher personal controls over individual bank chiefs if their conduct does not improve.

TDs are also critical of plans by Permanent TSB as well as AIB to sell off large numbers of distressed mortgage loans, amid concerns unregulated firms or vulture funds could take them over.

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