Growing tracker scandal will rumble on, despite efforts of banks to put it behind them

IF the banks and their regulator thought they could draw a line under the tracker scandal and move on, then they have been mistaken — this one is due to run on for a bit yet. Before Christmas, the Central Bank told us the number of mortgage holders affected by the industry-wide tracker scam has jumped by two-thirds in a three-month period.

The new figure was 33,700, with the total pushed up by admissions of more cases at Bank of Ireland, KBC Bank and AIB.

Regulatory and political pressure forced these lenders to concede defeat on thousands of cases they were disputing.

Back in September, the number the Central Bank said was affected was 13,000 mortgage accounts. In the space of a few months, the numbers of mortgage holders either wrongly denied their right to a low-cost mortgage linked to the main European Central Bank rate, or put on the wrong rate, had almost tripled.

But in December, the Central Bank insisted the new 33,700 figure represented the bulk of cases.

“While the Central Bank’s view is that the vast majority of customers have been identified, we will continue to review, challenge and verify the work undertaken by the lenders and complete our intrusive on-site inspection programme,” the regulator said.

Roll on to now and the indications are that there are as many as 5,000 more cases that have still to be sorted out.

Expert in the area Padraic Kissane told the Oireachtas Finance Committee recently that AIB/EBS, Bank of Ireland, Danske Bank, KBC Bank, Permanent TSB and Ulster Bank have more cases that have yet to be admitted.

And Danske Bank, which has since left the retail banking market here — but first introduced low tracker rates linked to home values — has a number of outstanding cases, Kissane said.

Kissane has been pursuing tracker cases since the issue was first revealed by this journalist in 2009. He now estimates that the overcharging of households amounts to €700m. And the latest trick sees some lenders denying mortgage holders documents held by the banks when they are seeking to have a tracker restored and get a refund.

Kissane said pertinent documents were being withdrawn by the lenders when consumers make a data access request. This was making it more difficult to resolve the tracker scandal.

The scandal has already cost banks €1bn. It could end up costing them even more, with more cases to come and fines on the way.

Just don’t expect any senior bankers to have to personally suffer any consequences. That is something they do in other countries.