IFSRA report condemns AIB inaction on overcharging

The Irish Financial Services Regulatory Authority has accused certain members of AIB staff and management of witholding information on the overcharging scandal at the bank.

Speaking today, IFSRA chief executive Liam O'Reilly said: "The failures within AIB uncovered by the investigations are completely unacceptable. We will not tolerate such practices within the financial services industry."

In its final report into the scandal, IFSRA said at least seven opportunities arose to identify and disclose the overcharging between 1998 and 2004, but this was never done.

It also said AIB took action to address the overcharging between January and April of this year without notifying the regulator.

In addition, the bank’s procedures for raising matters “up the line” were found to be inadequate and IFSRA said this contributed to the overcharging persisting for so long, along with weak controls in relation to the monitoring of customer charges.

The IFSRA report published today confirmed that AIB customers were overcharged by a total of €34.2m, including interest, for a range of services. Around €13.5m of this has already been repaid.

Separately, the IFSRA also found that an offshore company which managed funds belonging to senior AIB executives benefited to the tune of €48,000 from artificial deals.

The regulator said the company, Faldor Ltd, was managed by Allied Irish Investment Managers (now called AIBIM) and the €48,000 came out of AIBIM’s own funds.

IFSRA said it had ordered AIB to respond to the scandals by making all efforts to refund overcharged customers and to consider and apply disciplinary action against individuals found to be responsible in both issues.