AIB snubs Oireachtas committee invite

AIB rejected an invitation to appear before an Oireachtas committee next week to answer questions about its €20 million overcharging scandal just as it emerged that another 500 customers were also charged fees without their consent.

AIB chief executive Michael Buckley informed the Joint Committee on Finance and the Public Service yesterday that “a fruitful discussion” about its overcharging could only take place after the bank had concluded its own inquiry into the matter in mid-June.

In a letter to the committee, Mr Buckley said the bank would be “very happy” to answer all questions about its overcharging on foreign exchange transactions at that stage.

However, several members of the committee reacted angrily to Mr Buckley’s offer of AIB officials appearing before it in early July, and not as requested on next Wednesday.

Labour finance spokesperson, Joan Burton, said the bank’s response was “extremely disappointing and frustrating”.

“AIB must seek to publicly clarify as soon as possible the extent of overcharging by the bank in relation to a range of products and service,” said Ms Burton.

She claimed the urgency of the situation had been reinforced by the emergence of a second AIB overcharging controversy, although the bank yesterday played down its significance, claiming it affected only 0.5% of their mortgage customers.

An AIB spokesperson confirmed it had charged clients who had taken out a top-up mortgage with payment protection insurance without their knowledge. He explained the matter had come to the bank’s attention in the past week as a result of the extensive trawl which was ordered following news that AIB had overcharged customers by about €20m on foreign exchange transactions.

AIB has now promised to refund any of the 578 customers who did not wish to avail of the additional insurance, which was only applied since 2001. However, the bank stressed that the sums applying to such mortgage protection payments were relatively small.

Meanwhile, the chairman of the Joint Oireachtas committee, Seán Fleming, said it was ironic three Romanians each received a two-year jail sentence this week for taking money from bank customers’ accounts yet there was very little sanction against banks themselves.

Addressing the committee, Mary O’Dea, the consumer director of the Irish Financial Services Regulatory Authority (IFSRA), accepted that its on-site inspections at AIB had failed to pick up any of the bank’s overcharging practices. She explained inspections largely focused on cash dealings in foreign currencies as they constituted the bulk of such transactions in that division.

IFSRA chief executive Liam O’Reilly said the authority’s priority was to identify any affected AIB customers and to ensure they got their money back.