State-owned bank Permanent TSB has been accused of “robbing” customers and taking homes off people in the wake of incorrectly moving customers off tracker mortgages.
CEO Jeremy Masding apologised to borrowers yesterday and said a “systems failure” was responsible for taking low-cost mortgages off almost 1,400 borrowers.
However, Sinn Féin finance spokesman Pearse Doherty said such actions outside of a financial institution would see someone thrown into prison.
“You watched these individuals lose their homes,” he said.
This was “daily robbery” by an institution which took money off customers, the TD said at a hearing with the lender before the Oireachtas Finance Committee.
The courts last year upheld a finance ombudsman decision which had found that borrowers on tracker rates were unfairly switched to higher rates. This resulted in some mortgage borrowers going into arrears and losing their homes.
The situation saw families put onto fixed rates without options of returning to a tracker. In some cases, families had to pay an extra €500 a month.
The bank had fought the ruling all the way to the Supreme Court and had to pay compensation of tens of thousands of euro to some customers affected.
Mr Doherty said some officials with Permanent TSB — an institution 75% owned by the State — were paid over half a million annually in salaries.
He brushed aside suggestions it was just a “small error”.
He said that if he had taken thousands of euro off such borrowers that he would have been locked up in Mountjoy. “No heads had rolled at the bank,” he said.
CEO Jeremy Masding defended the actions of the lender.
“I didn’t hide anything, I stood up and apologised [at the time],” he told the committee.
The events had been a “sad” episode for the bank, he said, and a “detriment” for customers. However, he also insisted the bank had found no one person responsible and it had been a “systems error”.
This response angered Mr Doherty even more.
The decision to appeal the ombudsman case through the courts had caused “more hardship” to borrowers affected, said the Donegal TD, who questioned why there was no accountability at the State-owned lender.
“You took their money… how come nobody is going to be able to be held accountable?” he said.
Some €80m of the €140m in compensation for customers has been paid to date, the committee heard.
Meanwhile, Fianna Fáil finance spokesman Michael McGrath said 49,000 mortgage customers of Permanent TSB (PTSB) who are still paying the standard variable rate (SVR) of 4.5% should avail of savings available with the lender by switching to the bank’s Managed Variable Rate (MVR) product.
© Irish Examiner Ltd. All rights reserved