Banks to compensate another 3,400 in tracker scandal

THE banks face compensating a further 3,400 customers over the continuing tracker-mortgage scandal.

The additional victims bring the total number of borrowers denied the favourable rates by the banks to 37,100, the Central Bank revealed yesterday.

The industry-wide investigation concerns customers who should have been given the option of a cheaper tracker mortgage – or kept on a better rate.

The total number also includes 7,100 cases remedied following a prior investigation.

The Central Bank said a massive €459million had been paid in redress by the end of last month, an increase of €162million since the end of last year.

This includes 11 people who received more than €500,000 each after losing their homes due to the scandal.

All but 12% of customers impacted to date have received redress or compensation offers, with the remainder expected to receive theirs by the end of June.

Some further increase in the total number of impacted customers is also expected before the examination is concluded, the Central Bank said.

‘We recognise the devastating affect that lenders’ failures have had on people. We’re using our powers to force the banks into remedying the scandal they caused,’ said Derville Rowland, director general of financial conduct at the Central Bank.

Finance Minister Paschal Donohoe said: ‘I am pleased to note that this update demonstrates the progress lenders have made in providing impacted customers who have been identified with adequate redress and compensation.

As at the end of March, approximately 37,100 customers have now been identified as having been impacted by the tracker failings of their lenders.

‘This is an increase of 3,400 on last December’s figures, and includes 7,100 impacted tracker borrowers who were identified prior to the commencement of the industry-wide examination.’

So far, €459million has now been provided for customers identified up to the end of March, which Mr Donohoe described as ‘significant progress’.

He said he believes that lenders’ behaviour has been ‘completely unacceptable’ and stressed that – as the Central Bank has noted in its update – ‘the examination has exposed a clear lack of consumer-centred culture in lenders’.

A spokesman for the Irish Mortgage Holders’ Organisation, which campaigns for financially struggling homeowners, said: ‘It’s a big increase in the numbers and the worrying thing about it is every time they release new stats there’s another increase.

‘This time there’s another 3,400 added on – we’re above the 37,000 mark now.

‘It will have to stop at some point. You’d hope that this is it. You expect that there won’t be many more in this pot.

‘For the banks it means that the chances of Finance Minister Paschal Donohoe agreeing to any bonuses soon are probably zero. It’s a majority shareholder in AIB and its AGM was on today and he sent in a no proxy to the proposal to bringing back bonuses. Rightly so.’