AIB scandal - Gardaí should probe bank overcharging

Advertising in the national press, as AIB did last weekend, for customers to “bear with us” might give the impression that normal business was being disrupted and customers were being asked to put up with a temporary inconvenience.

The reality, of course, is that the bank needs their indulgence while it attempts to sort out financial bungling of monumental proportions which cost the customers, collectively, anything up to €20 million in grossly overcharged foreign exchange transactions.

The weekend advertisement revealed that customers were charged more than 2% on exchanges, which was considerably more than the 0.5% they had admitted to overcharging two weeks ago, on top of that for which the AIB had regulatory approval.

There was also the admission at the weekend that the bank overcharged people who bought travellers’ cheques worth more than €600 by 1.5%. That inept blundering went on from August 1995 until April of this year.

The extent of the negligence must be a disconcerting source of major worry to customers who believe they may have been unwitting victims of illicit transactions conducted by the bank.

Apart from the further admissions at the weekend, the initial €14m which the AIB admitted to taking from customers, was increased to €20m on the intervention of the Irish Financial Services Regulatory Authority (IFSRA).

That sum, along with another for €5m to cover interest, was lodged in the Central Bank without any demurring by AIB.

Given the scale of this scandal, it would warrant an investigation by the Garda Fraud Squad, for the sake of public confidence in AIB and, indeed, the wider financial sector.

The fact that there is no provision in legislation policing the financial sector which can hold the bank accountable should not mean it is totally immune to scrutiny by the gardaí.

It is essential that this situation be thoroughly investigated and surely the gardaí have the power to do so, irrespective of whether an individual, or individuals, make a complaint to them.

A garda investigation would go some way to satisfy a suspicious public of the probity of the bank, apart altogether from the inquiry conducted by IFSRA and certainly separate from any instigated by the bank itself.