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Here's how to check if your bank overcharged you on your mortgage - and what to do next

Up to 15,000 people are affected by the tracker mortgage scandal – but even people who were never on a tracker may have been overcharged.

Image: finance image via Shutterstock

THIS WEEK READERS were gripped by the story of a man called Ray Flavin, who is a victim of the tracker mortgage scandal that saw banks in Ireland overcharge thousands of mortgage customers on their interest rates – sometimes for years.

40-year-old Flavin, whose wife died suddenly earlier this year, is locked in a court battle with Bank of Ireland as it attempts to take possession of his family home, where he currently lives with his five children.

His story struck such a chord with readers, that a GoFundMe page for Flavin and his family has now raised more than €70,000. Though his story highlighted the human impact of the tracker mortgage scandal, it is just one example of thousands.

Dublin-based solicitor Gary Matthews, who represents a number of clients impacted by the scandal, said he is finding on average that people have been overcharged in the region of €20,000. One man who was €18,000 in arrears discovered he was actually owed €55,000 by the bank.

The Hub Ireland, which has been supporting Ray Flavin, has also come across a number of cases of people affected by overcharging. It has referred up to 80 people in total for a forensic account check and only one came back clear, founder Byron Jenkins told TheJournal.ie this week.

How do I know if I’ve been overcharged?

In a countrywide review, more than 15 lenders – including Bank of Ireland – were found to have charged up to 15,000 customers more expensive rates on their tracker mortgages.

If you were on a tracker rate and then moved to a different rate, like a standard variable rate or a fixed rate, you may be affected. You may also be a victim of the overcharging scandal if you were on a tracker rate and your margin increased.

If you are one of these people, your bank should contact you. The banks are still in the process of identifying affected customers and getting in touch with them, so you may not receive a letter until later this year.

We’ll explain later on what your options are once your bank has contacted you.

If you have not been identified by your bank as a customer who has been overcharged, that does not necessarily mean you haven’t been. Some customers who are not even on tracker mortgages have discovered overcharging.

“They were all overcharging,” The Hub’s Byron Jenkins claims. “If that’s the case, your bank has broken their contract.”

With some people, that means they’ve pushed you into arrears. They’re taking money that could have contributed to stopping the collapse of a business. At a basic level, in cases like Ray’s, they’re taking food off your table.

If you are worried that your bank has been overcharging you, you can hire an accountant to do a forensic check of your accounts. This will cost you money, and you do not need to get this done – it is an option that is open to you if you are concerned, or if you have money to spare at the moment and are curious.

If you have received a letter from the bank to tell you they’ve overcharged you, they will do this review of your account for you, so wait to hear back from them.

How much will that cost me?

Jenkins and other volunteers at The Hub Ireland refer people who have mortgage trouble to an accountancy firm in Dublin called Murlyn Accountants. In these cases, they are checking to see if the bank, which is usually pursuing the customer for arrears, actually breached the contract itself by overcharging.

For a fee of €100, the company will do a brief assessment of the account to see if there is overcharging. Once they identify an anomaly, a full forensic check costs a further €300.

There are a number of other forensic accountancy firms across the country that offer this service and prices vary. The Hub also lists Interest Rate Check Ireland on its website with a price of €250 for an uncertified check. This can later be certified for around €100.

On its website, this company says that 75% of the mortgages they have analysed to date raised issues and possible errors.

Another popular choice is Bankcheck, a firm based in Northern Ireland, though the price is higher. The fee for a thorough forensic assessment of your accounts is just over €1,000.

What will they need from me?

In order to do the assessment of your account, they will need:

  • Your loan offer letter
  • All of your mortgage statements
  • The TRS applied to your mortgage account

TRS stands for ‘tax relief at source’. You can find out what TRS was applied to your account by contacting Revenue.

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What if the bank has sent me a letter to tell me they charged me the wrong rate of interest?

It is likely you will receive an initial letter informing you they have been overcharging you, but not telling you exactly how much they overcharged you.

Once the bank has reviewed your account, you will receive a follow-up telling you how much they owe you. The bank will say this amount is being refunded to you and will most likely offer you compensation on top of this of 10-15%.

The advice from solicitor Gary Matthews is to cash any cheque they send you, and don’t be afraid to spend that or any other money they refund you. That is your money.

However, cashing those cheques and spending that money does not have to be the end of it. It does not stop you from further pursuing the bank for compensation.

“Banks are not compensating people for the losses they have incurred during the time they were being overcharged,” he explained.

“What I mean by that is the loss of opportunity to use their money. The loss of opportunity to go away on a holiday, or the loss of opportunity to spend money on their children or the loss of opportunity to spend money on that business they were always thinking about.”

People don’t understand the consequences the overcharging scandal has had on their personal lives. The pressure that this brought to bear on relationships. What we have found is that a large percentage of the cases their personal relationships with friends and families were affected. Some relationships did not survive, people had to go to family members and ask to borrow money to keep up these payments and that was a huge source of personal embarrassment.

He referenced one case in which a bank had a possession order on the home of a man who was €18,000 in arrears. It turned out after an assessment of his account that he as actually €55,000 in credit.

“Not only did they set aside the order, they’ve reimbursed him his €55,000 and we’re pursuing them for consequential losses. He was on the verge of being put out of his family home.”

Read: Tracker mortgage scandal: Widower charged wrong interest rate may now lose family home>

More: ‘I was living in fear’: Kerryman thanks supporters as fundraising campaign passes €40k>

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