Irish banking faces another overcharging scandal, as EBS investigates the way it has bundled charges for building and life insurance payments and mortgage protection insurance into its monthly mortgage bills.
It's not clear from the report what has happened here.
The investigation involves cases where EBS charged customers for payments on premiums on insurance products that had closed but that the lender nonetheless continued to add interest to the mortgage repayments.
I don't really understand this.
I was asked last week if I knew anything about the issue and I said I didn't. What was suggested to me at the time was
1) EBS bundled insurance premiums and mortgage payments into the same payment
2) The customer went into arrears and so did not pay the insurance premium
3) They were charged interest on the insurance premium - which is not allowed
I was not aware that it was not allowed to charge interest on unpaid insurance premiums.
If my mortgage repayment is €600 and my insurance premium is €50 and I pay €300, are they supposed to take the €50 off for the insurance premium and €250 off the mortgage repayment?
So does this problem arise only where the repayments are less than the actual insurance premiums due?