PTSB and Ulster Bank are examining if they wrongly charged customers interest on missed insurance payments after they defaulted on their loans. This is according to a story in the Sunday Times business section yesterday.
This comes after a similar revelation at EBS, part of AIB, which appears to have overcharged approximately 500 customers. All those affected were sold mortgage protection and householder policies under “block policies” in which the premiums were bundled into the mortgage repayments. Interest was incorrectly charged on the insurance premiums when borrowers stopped paying their mortgages.
PTSB is quoted in the article as being “currently not aware” of having a similar issue as EBS but is looking into it, whilst UB appears to be looking at customers in its First Active unit.
According to Goodbody Stockbrokers, "The overcharging issue is obviously unfortunate but appears to be in the hundreds per bank (if at all), relates to interest on missed insurance premiums (so figures per customer likely to be small) and has already been “out there” in the public domain in relation to AIB, so the impact on share prices is likely to be minimal."