Anglo overcharged for 14-year period, court told

The liquidator of the former Anglo Irish Bank has admitted in court that the lender was overcharging customers for a 14-year period up to 2005.

John Flynn, a former property developer, had made the allegations last week as part of an action to prevent the liquidation of Anglo’s successor, IBRC’s estimated €1bn assets in the US. And those allegations were confirmed yesterday by the special liquidator for IBRC, Kieran Wallace of KPMG.

Testifying in the Bankruptcy Court in Delaware, Mr Wallace said the majority of variable rate loan customers in the Republic of Ireland, Isle of Man, and the US had been overcharged between 1990 and 2004.

About 25% of loans in the UK were overcharged for 14 years up to 2005 and that the issue had been identified in Jun 2010 and a forensic probe was launched.

Mr Flynn filed a five-page document prepared by forensic banking analyst, Eddie Fitzpatrick, which supported his claims that he was defrauded by Anglo.

In the document, Mr Fitzpatrick said he audited at 240 variable rate (Dublin inter-bank offered rate) Dibor/Euribor (euro inter- bank offered rate) loan accounts held by 31 separate Anglo customers between 1990 and 2004.

In every one of these loan accounts, he found evidence of overcharging as a result of “loading” interest rates.