Uls te rBank faces €30m compensation bill following latest overcharging fiasco
ULSTER Bank will fork out close to €30m in compensation to thousands of its business customers over the next nine months as the lender grapples with another fee blunder.
The bank only discovered it was overcharging customers linked to up to 18,000 accounts in April 2017. The problem came to light after the Central Bank ordered Ulster Bank to conduct a wider trawl of its business in the wake of the tracker mortgage debacle.
Ulster Bank recently admitted to an additional 1,500 to 2,000 loans affected by the overcharging, provoking censure from Finance Minister Paschal Donohoe.
This latest error, which amounted to a fractionally higher interest rate charge, is likely to further muddy the sector’s reputation given the scale of customers affected and because it emerged only at the behest of the regulator.
The bank expects the financial impact to its customers to be relatively small with the average redress, which will include compensatory interest, totalling less than €2,000.
While the vast majority of affected borrowers have already been returned to the correct rate, the bank plans to write to customers on June 28 to explain the mix-up and notify of the redress due.
Eddie Cullen, Ulster Bank’s head of commercial banking, issued an apology for the latest slip-up, adding “although this will take time to fully resolve, we recognise that full resolution is essential for customers and in building their trust in Ulster Bank”.
The regulator has closely monitored Ulster’s handling of this fresh overcharging issue but it is unclear if the bank will face sanctions for the error.
A Central Bank spokesperson said it “expects all firms to have adequate systems and controls in place”.
The spokesperson added: “Where issues arise that impact customers, they should be addressed and rectified, with the aim of protecting consumers’ interests.”