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KBC Bank Ireland fined €18.3m by the Central Bank

Written by Robert McHugh, on 24th Sep 2020. Posted in Financial

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It was announced today that the Central Bank of Ireland reprimanded and fined KBC Bank Ireland €18,314,000 in respect of KBC’s serious failings to certain tracker mortgage customers holding 3,741 customer accounts from June 2008 to October 2019. KBC has admitted in full to 12 regulatory breaches.

The Central Bank has imposed a fine at the highest end of its sanctioning powers, reflecting the gravity with which the Central Bank views KBC’s failures.

The Central Bank said the impact of KBC’s failings on its customers, which related to 3,741 accounts, was "devastating" and included significant overcharging and the loss of 66 properties. 

Additionally, the Central Bank said KBC’s engagement and co-operation with the Central Bank’s Tracker Mortgage Examination (the “TME”) was "deeply unsatisfactory" and that KBC caused avoidable and sustained harm to impacted customers due to the Firm’s unwillingness to acknowledge its failings until December 2017 and to take immediate action to apply the protections of the TME. 

According to the Central Bank, had KBC adhered to the TME guidelines sooner, without the need for significant and sustained Central Bank intervention, the harm to its customers – particularly incidences of property loss - would have been significantly reduced.

The Central Bank determined that the appropriate fine was €26,162,857, which was reduced by 30% to €18,314,000 in accordance with the settlement discount scheme provided for in the Central Bank’s Administrative Sanctions Procedure. This will be paid to the Exchequer.

This fine is in addition to the €153,524,363 that KBC has been required to pay to date in redress and compensation and account balance adjustments under the TME to its impacted tracker mortgage customers. 

In a public statement today, the Central Bank said, "By placing their own financial interests ahead of their customers’ best interests, KBC failed to adequately consider their obligations under the Consumer Protection Codes, which were put in place in order to protect customers in their dealings with financial service providers."

Source: www.businessworld.ie

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