Payments reach €459 million – Central Bank Tracker Mortgage Examination

• Total redress and compensation of €459 million paid out by lenders to affected customers at end-March, an increase of €162 million since December
• Number of affected customers stood at 37,100 at end-March, an increase of 3,400 since December, largely as a result of verification process
• 88% of all accounts identified and verified to date have received redress and compensation offers, with the remaining 12% expected to receive theirs by end-June

The Central Bank has published its April update on the Tracker Mortgage Examination, showing that, at end-March, banks and smaller lenders had paid out €459 million to customers affected by their failings. This is an increase of €162 million since the December update on the Examination.

The update also showed that an additional 3,400 affected customers have been included by lenders for redress and compensation, largely arising from the verification process by lenders. This brings the total number of affected accounts at end-March to 37,100. 88% of all accounts identified and verified to date as part of the Examination have received offers of redress and compensation, with the remaining 12% expected to receive their offers by end-June.

As part of the update, information on the range of payments being made by lenders has also been published. Payments made to affected customers vary in value based on factors such as the amount borrowed, the length of time the customer was overcharged, the margin by which the customer was overcharged and the level of detriment suffered, including whether the customer suffered loss of ownership of property directly as a result of lenders’ failings.

In terms of the numbers of affected customers in each category, approximately 63% of redress and compensation payments made to end-March were under €10,000. Some 29% were in the €10,000 to €50,000 range, while c.6% were between €50,000 and €100,000. Approximately 450 people received redress and compensation of more than €100,000, including 11 customer accounts which received redress and compensation in excess of €500,000 due to loss of ownership of properties.

In terms of the total paid in each category, 48% of all redress and compensation paid to date has been in respect of customer accounts in the €10,000 to €50,000 category, and another 24% has been in respect of the €50,000 to €100,000 category. The above information can be viewed in charts 5.4 and 5.5 of the update.

Extensive review and supervisory challenge work is ongoing. While this work is well advanced, it will continue until the Central Bank is satisfied that all affected customers have been identified and included for redress and compensation. Therefore, while the Central Bank believes that the majority of affected customers have been identified, it is expected that there will be some further increase in the number of affected customers before the Examination is concluded.

Derville Rowland, Director General, Financial Conduct said: “We recognise the devastating effects that lenders’ failures have had on people. We’re using our powers to force the banks into remedying the scandal they caused. The payment of redress and compensation to those affected is now very significantly advanced, and proceeding in line with the timelines set out by the Central Bank.

“As the Central Bank has previously set out, consumers who receive a payment from their bank can cash their cheque safe in the knowledge that they can still appeal the amount they have been awarded. The amount they have been awarded cannot be reduced as a result of an appeal: What they have, they hold.

“The Central Bank will continue to closely monitor the work of lenders as they progress through to the conclusion of making payments to those they have failed. We will continue to ensure that lenders deliver on their commitments to make right their failings.”

A final report on the Tracker Mortgage Examination will be published upon completion of the Examination. Separately, enforcement proceedings against six lenders are also under way.

Notes

• The €459 million paid out by lenders to end-March includes €47 million paid out outside of the Tracker Mortgage Examination.
• The figure of 37,100 impacted is an aggregate figure including c.30,000 affected customer accounts accepted by lenders to date as part of the Examination as well as c.7,100 tracker mortgage cases remediated following Central Bank intervention outside of the Examination.
• Enforcement proceedings have commenced against six lenders: 

• permanent tsb p.l.c..
• Ulster Bank Ireland DAC.
• Bank of Ireland Group (The Governor and Company of Bank of Ireland and Bank of Ireland Mortgage Bank trading as Bank of Ireland Mortgages).
• KBC Bank Ireland plc.
• Allied Irish Banks, p.l.c.
• EBS DAC.