After ‘dragging their feet’, banks to offer customers compensation

Banks involved in the tracker mortgage scandal are expected to make fresh pledges to compensate affected customers after the Government gave company bosses a dressing down over “dragging their feet”.

Bank chiefs were hauled into Government Buildings and quizzed about the delay in paying back and compensating the estimated 13,000 customers identified as being ripped-off.

The Government later issued a statement warning that the behaviour of the banks in relation to removing people from tracker mortgages was “completely unacceptable”.

After Finance Minister Paschal Donohoe met the CEOs and chairmen of KBC, Bank of Ireland, and Permanent TSB, the statement said the banks have been “dragging their feet in solving the problem, at real human cost”.

Mr Donohoe also met Central Bank governor Philip Lane yesterday and noted the regulator’s investigation into the tracker mortgage scandal had been “the largest and most complex prudential investigation ever undertaken in Ireland, involving around 2m mortgage accounts going back many years across 15 lenders”.

Mr Donohoe said it was “very disappointing” that despite the significant management and board changes that have taken place since the onset of the financial crisis, there “still seems to be a cultural issue with some of the banks”.

The statement says that people affected should have had their tracker mortgages restored and been fully compensated as soon as possible. It says banks would make statements later this week, once further meetings with Ulster Bank and AIB, among others, are finished.

Permanent TSB said it expected to repay and compensate customers by Christmas.

A Cabinet meeting last night saw ministers voice concern about the inaction of lenders to own up and repay customers.

Financial advisor Padraic Kissane, who is helping customers, was reluctant to believe bankers would commit to change, admit their wrongs, and fully compensate customers.

He believes as many as 30,000 customers have been ripped off.

Speaking to RTÉ, Mr Kissane said banks had refused to fix the problems for years and he questioned how suddenly it would all be resolved in a few weeks.

“I’m waiting to see, you’re asking leopards to change spots,” said Mr Kissane, adding that there was a lot of “resistance and condescension” among banks.

Banks would try “every option” in order to stop customers going back to low-cost tracker loans, he claimed.

Mr Kissane warned that the financial scandal was damaging the country. He said the reputation of Ireland was being “destroyed” with Brexit on the way.

Meanwhile, Fianna Fáil will push for the laws to be changed, for the banks to face fresh penalties, and for class action cases to be legislated for as part of a Dáil motion tomorrow.

The party wants “a thorough investigation” as to how the tracker scandal occurred and a probe into whether there was any “co-ordination, formal or informal, across the industry”.

Any offences should be reported to Revenue and gardaí, among others, it says, and extra powers should be given to the Central Bank.

The Government should also vote against the reappointment of directors to the banks in which the State is a shareholder, and introduce legislation to stop repossession proceedings on tracker-related mortgages until all affected customers are redressed, the party will say during the Dáil debate tomorrow night.