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Tracker mortgage scandal: Permanent TSB hit with €21m fine, the largest-ever imposed by Central Bank logo 30/05/2019 Charlie Weston
a group of people walking in front of a store: Permanent TSB on St. Stephens Green
Pic Steve Humphreys Permanent TSB on St. Stephens Green Pic Steve Humphreys

THE largest fine ever imposed by the Central Bank has been given to Permanent TSB for regulatory breaches that affected thousands of tracker customers.

The regulator has reprimanded and fined Permanent TSB €21m.

It said this was due to “serious failings to 2,007 tracker mortgage customer accounts which were impacted for the period between August 2004 and October 2018”.

The Central Bank said the bank did unacceptable harm to its tracker mortgage customers.

Along with the fine, Permanent TSB has had to pay €54.3m in redress and compensation and put the 2,000 customers back on the attractive tracker rates.

It is the first of six banks to be fined over the handling of tracker cases.

Bank of Ireland, AIB and its subsidiary EBS, Ulster Bank, KBC Bank can also now expect hefty fines, which could mean up to €100m will be paid by the lenders.

The Central Bank said the original fine for Permanent TSB was €30m, but this was reduced by 30pc as the bank made a settlement with the regulators, effectively accepting the fine

Permanent TSB failed to warn some of its customers about the consequences of decisions they might make relating to their mortgage. This was when customers choose to opt out of their tracker rates for a period, but were not told they might lose the valuable tracker rate.

The bank was also accused by the Central Bank of operation and systems failings.

The Central Bank said: “PTSB made a decision to deny certain customers their entitlements to the correct lower tracker rate between 2009 and 2010 unless the customer specifically requested it, or queried or complained.”

It was also accused of an incorrect legal interpretation of contractual terms and conditions.

The Central Bank’s Director of Enforcement and Anti-Money Laundering Seána Cunningham said the taking out a mortgage is the single most significant financial commitment most people will make in their lifetimes.

“Consumers must have confidence that lenders are acting in their best interests, particularly given the complexity of mortgage documents they need to understand in order to make the best decision. Firms must fully adhere to all legal and regulatory obligations, including the Central Bank’s Consumer Protection Codes that we have put in place to ensure that consumers are treated fairly by the firms we regulate.”

Law changes in 2013 doubled the maximum monetary penalty the regulator can impose on a financial firm for rule breaches, to €10m, or 10pc of turnover, and for individuals from €500,0000 to €1m.


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