Ul­ster Bank €36m over­charge er­ror

Irish Examiner - - Business - Pádraig Hoare

Ul­ster Bank’s ad­mis­sion that it may owe around €36m to 18,000 busi­ness loan cus­tomers be­cause of an over­charg­ing er­ror has been slammed as “yet an­other shock­ing slap in the face for cus­tomers” while the sec­tor is “reel­ing” from the tracker scan­dal.

The RBS-owned bank said, as part of its tracker ex­am­i­na­tion, it con­ducted a re­view of busi­ness prac­tices, and pro­cesses over­all and sep­a­rately uncovered 18,000 busi­ness loan and over­draft cus­tomers that had been in­cor­rectly over­charged since 2012.

Ul­ster Bank’s man­ag­ing di­rec­tor of com­mer­cial bank­ing, Ed­die Cullen said: “The over­charge is less than onethird of 1% per an­num and the average re­fund due is less than €2,000. We sin­cerely apol­o­gise to our cus­tomers for this and 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.”

It is be­lieved the er­ror was uncovered in April 2017 and that the Cen­tral Bank was in­formed, but that the Depart­ment of Fi­nance and Min­is­ter Paschal Dono­hoe were not in­formed un­til it be­came pub­lic yes­ter­day evening.

Cus­tomers will be writ­ten to in the com­ing weeks and 75% are ex­pected to be re­dressed and com­pen­sated by the end of the year, while it may take un­til the first quar­ter of 2019 for the re­main­ing “more com­pli­cated” loans to be re­solved.

In March 2012, the bank ad­vised cus­tomers, via let­ter, that it was chang­ing the def­i­ni­tion of “cost of funds”, which is a vari­able com­po­nent of the in­ter­est rate charged on their ac­counts.

As part of the tracker ex­am­i­na­tion, the Cen­tral Bank or­dered all lenders to ex­am­ine their prac­tices.

Dur­ing its re­view, Ul­ster Bank found that the fa­cil­ity doc­u­men­ta­tion of some cus­tomers’ ac­counts did not al­low for the change in def­i­ni­tion, and they were there­fore over­charged.

Fianna Fáil fi­nance spokesman Michael McGrath said the rev­e­la­tion came at a time when bank­ing was “reel­ing from the tracker scan­dal”.

“How many more over­charg­ing scan­dals are there of which we have not been made aware? We need to know in de­tail how this hap­pened, what steps were taken since, and whether there are any wider im­pli­ca­tions across the other banks.”

Sinn Féin fi­nance spokesman Pearse Do­herty said it was “yet an­other shock­ing slap in the face for cus­tomers”.

“In a way I am not sur­prised, be­cause lit­tle has changed when it comes to bank­ing cul­ture. They will con­tinue to over­charge. I no­tice there are very few sto­ries of banks un­der­charg­ing cus­tomers.”

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