Bank of Ireland fines record €100m over its treatment of customers in Tracker mortgage scandal

Bank of Ireland has been fined €100m by the central bank for willfully denying thousands of its customers cheap tracker mortgages.

It is the largest fine for a lender under the regulator’s mortgage inquiry, with the Bank of Ireland being the latest lender to be sanctioned for its role in the scandal.

The bank has failed nearly 16,000 customers by refusing them a tracker or putting them on the wrong tracker rate at a time when mortgage rates were rising.

Bank of Ireland’s failure resulted in the loss of 50 properties, including 25 family homes, which could have been avoided had Bank of Ireland met the most basic and fundamental of its consumer protection obligations, the central bank said.

Bank of Ireland has fully admitted to 81 separate regulatory breaches.

We unreservedly apologize to all customers who have been harmed by the Tracker mortgage issue

The central bank set the appropriate fine at €143.6 million, but this was reduced by 30% to €100.5 million in accordance with the netting rebate scheme provided for in the central bank rules.

This is the highest fine ever imposed by the Central Bank and comes on top of more than €186.4 million already paid by the Bank of Ireland to affected customers identified prior to and as part of the Central Bank’s Tracker Mortgage Examination .

Over the summer, AIB and its EBS unit here were fined nearly €100 million for refusing to provide people-tracking mortgages.

The AIB Group erroneously denied nearly 13,000 borrowers their right to then cheap mortgages linked to the European Central Bank’s base rate.


Interim Bank of Ireland Governor Gavin Kelly. Photo: Frank McGrath

The Bank of Ireland has been forced to indemnify 15,900 Tracker customers, the largest number of any lender to date with tracker mishandling.

These cases include people who were incorrectly denied a tracker and homeowners who were on the wrong tracker plan.

Gavin Kelly, Interim Governor of the Bank of Ireland, said: “Today’s statement from the Central Bank of Ireland is extremely critical of the Bank of Ireland. We understand – and fully accept – why this is so.

“What happened in relation to tracker mortgages was wrong. It should never have happened. We are very sorry it happened.

“We offer our unreserved apologies to all customers who have been harmed by the Tracker mortgage issue. The impact has been significant and far-reaching, including loss of housing in the most severe cases.

“Banking is based on trust, but our mistakes have damaged that trust. We learned the hard lessons and took steps to ensure we are a more customer-centric bank today. This work will continue. Rebuilding the trust of both our customers and the broader society we serve will take time, but we are committed to this journey.”

The tracker scandal dates back to 2008 and ripped through almost every mortgage lender.

In some cases, banks have misinterpreted legal or contractual terms and denied some customers their right to a tracker.


The Central Bank of Ireland offices in Dublin’s Docklands. Photo: Jason Alden/Bloomberg

Banks have also failed to warn customers of the consequences of canceling their tracker mortgage to opt for a fixed rate for a period of time. These people were told at the end of the set period that they could no longer come back to their inexpensive tracker.

In June, the central bank fined AIB Group €96.7 million for its consumer protection violations during the Tracker mortgage scandal.

A tracker mortgage is a type of home loan in which the interest rate on the mortgage tracks that of another publicly available interest rate, typically the rate set by the ECB.

The five main banks involved in the Irish mortgage scandal are AIB, KBC, Permanent TSB, Bank of Ireland and Ulster Bank. EBS, a subsidiary of AIB, and Springboard Mortgages, a subsidiary of Permanent TSB, were also involved.

Around 40,000 customers were mistakenly deducted from their tracker mortgages and rerouted to a higher interest rate. In many cases, people lost their homes due to the scandal. Bank of Ireland fines record €100m over its treatment of customers in Tracker mortgage scandal

Fry Electronics Team

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