Big inconsistencies in tracker redress packages, says FF
Banks compensation to families varies widely
THERE are ‘dramatic inconsistencies’ in the compensation packages being offered to the thousands of homeowners affected by the tracker scandal, Fianna Fáil has said.
The party’s finance spokesman, Michael McGrath, says that compensation varies wildly between banks, with some offering 7.5% compensation and others offering 30%.
Mr McGrath said that ‘according to the Central Bank, the compensation being paid to customers affected by the tracker scandal should be reasonable and should reflect the level of detriment suffered by the customer’.
‘I am not satisfied that the compensation being offered by some of the banks reflects the harm they have caused to people’s lives,’ he added.
Mr McGrath said AIB is giving its customers the largest package, ranging between 15% and 30% for principal dwelling homes and 7.5% and 15% for investment properties. However, others are providing much less.
‘Bank of Ireland has started writing to customers with the details of their redress and compensation and in all the cases I have seen, the compensation is a flat 10% of the amount overcharged,’ said Mr McGrath. ‘For Ulster Bank, compensation is 12% for nonarrears cases and between 13.5% and 20% for cases in arrears. The Permanent TSB compensation seems to be in the region of 10%.’
Mr McGrath also said that there appears to be very large variations in payments towards the cost of getting independent professional advice. ‘Bank of Ireland appears to be paying just €250 while AIB seems to be paying over €615,’ he said. ‘I have seen cases where a customer of one bank received €615 for independent professional advice where the overcharge was a mere €10.55, while another customer with another bank received just €250 for advice where the amount overcharged was over €34,000.
‘These wild inconsistencies are alarming to say the least.’
Mr McGrath said it is ‘unacceptable that two customers with similar circumstances can have such widely different outcomes based simply on what bank they are dealing with’. He added: ‘Up until now much of the attention has been rightly focused on fully identifying all the customers involved but now, as people begin to receive compensation, they need to know that they are being treated fairly.’
When asked for comment, KBC said it had already released a statement and had nothing further to add.
A spokesman for Ulster Bank said: ‘Deputy’s [Mr McGrath’s] ranges are correct for us. We also give each customer €600 for independent advice.’ The spokesman also pointed out that the bank offers an upfront initial €50,000 payment to customers who lost their homes as a result of the issue. All of the other banks were contacted, but had not responded at the time of going to press.
Meanwhile, the full cost of compensating homeowners affected by the tracker scandal is nearing €1billion.
Ulster Bank has set aside €211million for redress and compensation, while in AIB, a provision of approximately €190million has been set aside. The figure for Bank of Ireland is around €200million.
KBC has said it is putting aside €59million in total to cover redress costs, while earlier this week Danske Bank said it would be putting aside €600,000 for compensation.
PTSB is expected to put aside around €145million to deal with the controversy – which brings the compensation levels for those banks to around €805million.
‘Doesn’t reflect harm caused’ Full cost nearing €1billion