AIB is called on to compensate more investors who lost in risky Belfry funds

A leading financial adviser has called on AIB to compensate more of its customers who lost money in a property fund.

Adviser Padraic Kissane claimed that a number of the investors who lost money in the speculative Belfry funds have not had their cases dealt with correctly by AIB.

Mr Kissane is a member of the Irish Banking Culture Board and has played a prominent role in exposing tracker mortgage overcharging.

The speculative investments were marketed to AIB clients between 2002 and 2006, with the money invested in commercial property in the UK.

Early versions of the fund returned profits but the property collapse meant later investors lost out. It is understood AIB has set aside around €233m to compensate Belfry investors.

Mr Kissane, who has been examining the issue since last November, claimed that in many cases, customers had invested all their savings in Belfry funds.

He said: “I am especially highlighting my concerns regarding customers who borrowed money to invest in Belfry, and also customers who invested in Belfry through their pension plans.”

This is because the product was a geared investment, which tend to be riskier, he said.

He said the customers were mainly recorded by the bank and its subsidiaries as being “high-risk takers” with their money, but he said this characterisation by AIB was incorrect in most cases.

He said none of those he had spoken to had been told the investments were high risk and instead claimed they were presented as a “sure thing”.

Mr Kissane appealed to those who invested in Belfry, particularly those who put money into funds 5 and 6, or who had not been fully refunded their initial investment, to contact him.

AIB said that in 2021 it announced a case-by-case review to determine if a refund may be due to some investors. Review outcomes and payments have been communicated to 99.8pc of investors.

Where the review concluded the investment may have been unsuitable, investors received a full repayment of their investment plus additional compensation payments, AIB said.

Where the review concluded that an error may have been made in the process, investors received 50pc of their investment plus additional compensation payments.

Where the review found the fund was suitable for the investor to whom it was sold, no payments were made.

All investors had the right to appeal to an independent panel and were offered a payment of €1,250 towards independent professional advice.