Belfast Telegraph

Tracker mortgage scandal: 22,000 borrowers denied right to cheaper loans

More than 22,000 mortgage borrowers were done out of low-cost interest rates by banks, the latest figures on a multimillion euro overcharging scandal have revealed.

Allied Irish Banks confirmed 12 of its customers lost their homes over the controversial refusal to give them their right to the cheaper tracker loans.

There were about 90 other repossessions in the midst of the affair.

After a week of meetings with bank bosses, Finance Minister Paschal Donohoe said the behaviour of the banks was disgraceful.

He warned that if he does not see sufficient progress by mid-December on compensation, redress and offers of new tracker mortgages he will consider new taxes, stricter reporting regimes or targeted action as a shareholder in three of the banks.

"It is now time that all banks seek to regain the trust of the Irish people by actions, not words," Mr Donohoe said.

He added: "It is clear to me, from the meetings over the last number of days, that significant cultural issues and challenges in some of the retail banks still exist.

"Customer interests have not been sufficiently protected or prioritised. This is unacceptable."

In a series of coordinated updates on the scandals, the banks revealed:

:: 14,982 affected customers have been identified in reviews of trackers since 2015.

:: 7,100 borrowers were found to have been impacted in an earlier examination taking the total number of confirmed cases to 22,082.

:: Of the five banks, Ulster Bank has set aside 175 million euro to cover compensation and redress; AIB 190 million euro; and KBC up to 60 million euro.

All the banks offered apologies.

Francesca McDonagh, Bank of Ireland chief executive, said the tracker issue was a personal priority with 4,300 customers to be compensated by the end of the year.

" All impacted customers must be identified as quickly as possible and treated fairly," she said.

"The examination will continue to be a priority until the position has been resolved for every last impacted Bank of Ireland customer."

AIB said it expects to have all its 4,152 affected customers repaid this year and in to 2018.

In a statement the bank said: "AIB has endeavoured to implement the most thorough and effective response to an issue that should not have arisen."

Ulster Bank is offering 50,000 euro upfront to any of its 3,500 affected customers and expects to complete its compensation payouts by the middle of next year.

Chief executive Gerry Mallon said: " We have listened, we are learning and we are focused on completing this process, putting this right and rebuilding our customers' trust in Ulster Bank."

Permanent TSB is making compensation offers before Christmas to 1,971 affected customers. It said it fully accepts the very strong concern and disapproval expressed by Mr Donohoe.

"The bank accepts the failures that led to this issue should not have occurred," it said.

KBC identified 1,061 customers and said it expects to find up to another 600 affected by the issue. Some compensation payments may not be finalised until next year, it said.

The bank said: "KBC fully acknowledges the past errors that occurred in relation to tracker mortgages should not have happened, were wrong and we sincerely apologise for this once again."

Central Bank governor Philip Lane was cautious about a new attitude among banking executives.

"Given some lenders' past behaviour, the Central Bank is under no illusion that this will require continued and concerted pressure to ensure all affected customers receive redress and compensation," he said.

Mr Lane said there are still significant and deep-rooted cultural issues and challenges with some banks.

The updates were released after Independent members of the Government called for a criminal investigation into the overcharging.

About 100 homeowners and investors lost properties in the scandal.

The TDs, which count Transport Minister Shane Ross and junior ministers John Halligan, Finian McGrath and Kevin Boxer Moran among their ranks, said the Government should be using its power as a major shareholder in some of the lenders to force board appointments and behaviour.

"The time for talking is over," the Alliance said.

"The banks were given plenty of notice that this was a problem they had to solve. Now it is obvious that a criminal investigation is needed to get to the bottom of the scandal."

As many as 15 lenders were involved in controversial decisions to deny people their right to a tracker mortgage.

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