This was in last Sunday's Sunday Times
Investigation into Permanent TSB failing mortgage-holders, says adviser
1,074 customers received compensation after they were unfairly denied tracker mortgages (Crispin Rodwell)
THE Central Bank of Ireland has been warned that an enforcement investigation arising from mortgage overcharging by Permanent TSB is failing hundreds of affected customers, who may be forced to challenge the outcome through the courts.
The investigation started last summer, when the Central Bank ordered Permanent TSB to begin a redress programme, refunding interest and paying compensation to 1,074 customers who were unfairly denied tracker mortgages after fixing their loan rates temporarily.
While all are being offered a return to tracker terms, the interest margins on more than 500 of the loans exceed two percentage points, with some having margins as high as 3.35 points over the European Central Bank rate of 0.05%. According to Central Bank data, the average rate for tracker mortgages across all lenders was 1.07% in December.
Padraic Kissane, a financial adviser representing about 150 Permanent TSB customers, warned the Central Bank last week that borrowers were being left with no option but to challenge the bank’s high margins in court.
“There seems to be a fundamental flaw in this investigation,” Kissane has said in an email seen by The Sunday Times.
“The redress process is now redundant for many hundreds of affected customers, resulting in all cases having to go through the courts system . . . I fail to see why 500 cases or more need to be registered in the court system in the middle of an enforcement inquiry. Many see the investigation as failing them.”
Permanent TSB said redress had been offered to about 90% of those affected by the overcharging.
“In terms of rates offered, the bank simply offered the appropriate rate that is relevant for each customer given their circumstances and the time they began the mortgage,” the bank said.
“This is highlighted by the fact that, of 1,074 customers who were [affected] by the issue, more than two-thirds were given the opportunity to move to a tracker rate currently of 2.4% or less.”
Permanent TSB said its redress programme had an independent appeals body, which was “designed to enable customers to have matters considered without the need, expense and delays involved in going to court”.
The Central Bank has ordered that all the banks submit a framework for a tracker book review by the end of next month.
The Sunday Times revealed last month that AIB had assembled a team of up to 300 employees whose remit would be to examine the bank’s tracker mortgage book to ascertain whether it had any liability regarding redress to its customers.