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PTSB hit with record fine for mortgage overcharging

Written by Business World, on 31st May 2019. Posted in Financial

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Irish lender Permanent TSB (PTSB) was fined a record 21 million euros by the Irish Central Bank on Thursday for issues related to the overcharging of customers entitled to cheap "tracker" mortgage rates.

The fine is the first levied in a series of investigations into Ireland's main banks over customers who were denied loss-making tracker mortgages, which follow the low European Central Bank rate.

Tracker mortgages were widely offered by Irish banks during the country's housing boom in the mid 2000s. But banks moved to reduce their exposure to the loss-making products after the 2008 crash.

"Our investigation found that PTSB failed to put their customers first, with distressing and, in some instances, devastating consequences," said Seana Cunningham, the Central Bank’s Director of Enforcement.

Twelve PTSB customers lost family homes due to the issue while 19 lost buy-to-let properties, it said.

Permanent TSB chief executive Jeremy Masding said in a statement that he "apologised unreservedly to all customers affected ... and for the distress caused as a result."

PTSB has admitted in full 42 separate regulatory breaches of the Code of Practice for Credit Institutions and the Consumer Protection Codes, the Central Bank said.

It said PTSB failed to warn customers about the consequences of decisions relating to their mortgage and failed to engage satisfactorily with regulators.

Approximately 40,000 customers of Ireland's main banks were impacted by the scandal and the banks had paid a total of 647 million euros in redress by the end of 2018.

Over 2,000 PTSB customers were affected and the bank has paid 54 million euros in redress and compensation. (Reuters)

Source: www.businessworld.ie

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