AIB business customers overcharged by €250,000

AIB is today at the centre of yet another overcharging scandal.

After the shock revelations involving the €25 million foreign exchange scam, it emerged last night that businesses were hit by excessive management time charges in the period up to 2001.

This latest saga comes just 24 hours after the shock disclosure involving university students denied €1.4m of promised discounts on their AIB current accounts.

In the latest twist to the AIB saga, business customers, it emerges, were overcharged by €250,000 on time charges for account services provided by bank officials, such as in-branch meetings with business clients or in specific work on business accounts.

Last night a spokesman said the bank had “no comment” to make on the latest mess-up to have gripped the bank in recent weeks.

The Irish Financial Services Regulatory Authority (IFSRA) is to report the findings of its investigations later this month while AIB is due to make its own findings public at the end of the month. IFSRA also refused to comment on the new revelations.

A spokeswoman said, however, that the investigation was continuing and that the trawl through all of the bank’s charges would continue after the first report has been published.

In the case of the €250,000, the monies were paid back, the relevant authorities were informed and it is believed that just 1% of the bank’s clients were affected.

According to a former AIB employee, the overcharging was done to boost earnings, but no evidence has surfaced to show that was the case.

As the number of revelations continue to undermine the bank’s credibility, concerned groups are stepping up their monitoring of what the bank has to offer.

“Fresher” offers aimed at attracting young college students to the various banks will be subjected to far greater scrutiny in future.

The Union of Students in Ireland (USI) said the banks and other businesses offering attractive packages to students will be monitored very closely.

USI student president Ben Archibald said: “AIB made a mistake when they should have implemented a system. But we want to now look across the line at types of deals being offered to students.”

Despite its refusal to go before the Oireachtas Committee on Finance and the Public Service to account for the serious charges made against it, the bank is not expected to suffer unduly.

Analysts believe once the IFSRA report is published and the matters are fully dealt with, that the bank’s share performance will improve.

Two years ago, AIB lost $691m (€556m) in its US subsidiary and the resulting fall-out was minimal.

As well as the overcharging scandals, the Faldor offshore account disclosures involving former top executives in AIB sent shock waves through the banking community.

AIB’s flagrant disregard for the tax laws scandalised ordinary citizens, but the bank looks to have come out the other side unscathed, despite the ongoing investigations.

Those implicated included Gerry Scanlan and Tom Mulcahy, who at various times held the top job within the country’s largest financial institution, as well as other high-profile executives of the bank.

AIB shares were last night up two cent at €12.42.