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Thursday 7 December 2023 Dublin: 11°C
Tracker Mortgage

Banks offer average of €194,000 to people who lost homes due to tracker mortgage scandal

There were 99 homes lost as a result of lenders’ failings as well as 216 buy-to-let properties.

THE CENTRAL BANK has published its final report on its examination of the tracker mortgage scandal, which saw tens of thousands of customers overcharged by their banks.

Lenders have paid €683 million in redress and compensation to impacted customers and 98% of the more than 40,000 affected customers have now received offers. 

There were 99 homes lost as a result of lenders’ failings as well as 216 buy-to-let properties. 

Lenders included minimum payments to customers who lost properties of €25,000 for buy-to-lets and €50,000 for private dwellings. The average redress and compensation paid in respect of loss of ownership of homes due to lenders’ failures is €194,000.

The Central Bank also required lenders to set up an independent appeals process to deal with affected customers who were dissatisfied with any aspect of the redress and compensation offer they received from their lender.

To date, 10% of affected customers have made appeals. The lenders’ independent appeals panels had awarded customers  €7 million at the end of May 2019.

The majority of upheld appeals arose from awards for additional detriment due to personal customer circumstances of which the lender may not have been aware at the time the original redress and compensation was awarded.

Today the Central Bank said after “extensive and robust supervisory challenge and assurance work to ensure lenders identified groups of customers affected by tracker failings”, the supervisory phase of the examination is complete.

Since the start of the examination, 13,000 impacted accounts were identified by lenders. A further 20,000 were identified following a Central Bank challenge to the lenders. Some 60% of affected accounts arose from contractual or transparency failings.

‘Immense distress’

The Central Bank completed its first enforcement action in relation to the examination at the end of May, fining Permanent TSB €21 million for its failings. Enforcement investigations against all the other main lenders are continuing.

Derville Rowland, Director General, Financial Conduct, said the scale of lenders’ tracker mortgage failings was “industry-wide, causing immense distress and damage to affected customers and their families”.

“It required an unprecedented regulatory response in the shape of the tracker mortgage examination, the largest, most complex and significant consumer protection review the Central Bank of Ireland has ever undertaken.

Through the examination, we required lenders to identify those affected and pay appropriate redress and compensation. Additionally, we continue to pursue lenders through our enforcement investigations. The outcome of our first enforcement action – which resulted in the largest fine imposed to date by the Central Bank – reflects the gravity with which we view lenders’ tracker failings.

“The examination revealed the unacceptable damage that misconduct can cause to consumers up to and including the loss of their homes and properties in some cases. Our message today – to all the firms we regulate – is very clear: Where firms fail to protect their customers’ best interests, our response will be robust and the consequences will be serious.”

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