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KBC admits an error in the calculation of mortgage rebate payments

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KBC Bank has admitted it made a mistake in calculating compensation for hundreds of tracker customers it has already compensated after they were found to have mistreated them.

The exiting lender was fined €18m in 2020 for devising a strategy to discourage borrowers from cheap credit and had “persistently” fought back when regulators pressed it to admit its mistakes, the researchers found central bank.

Borrowers lost 66 properties, including 11 family homes, as a result of the overdraft, the central bank said.

KBC Ireland initially admitted that only 93 of its customers were affected when the central bank opened an investigation into the scandal in late 2015.

The total has risen to more than 3,700, “but only after continued central bank challenge and intervention,” the regulator said.

It has now emerged that the bank wrote to 692 of the tracker victims, telling them that they had made a mistake in calculating the compensation they received.

The total amounts paid to these customers will not be increased. However, KBC offers customers the option of taking a larger part of their compensation as a direct payment instead of applying this money to their mortgage balance.

In a letter to Evan O’Dwyer, a Mayo-based attorney for a tracker victim, the bank apologized and admitted it made a mistake.

The letter from the Dublin law firm Lavelle Partners, seen by the Irish Independentstated, “Our client continues to maintain the position that the total amount of indemnity that our client provides to your client is accurate and reasonable.

“However, it was determined that a larger amount of your client’s reparation should have been provided as a direct payment rather than a reduction in her mortgage balance. Our customer sincerely apologizes to your customer for their mistake.”

Admission is granted following a final review of compensation and indemnity payments made by KBC for the tracker.

She found that in a number of cases she had overstated victims’ equity and now wants to give them the option of greater redress for overcharging by charging excessive interest rates.

This happened when it capitalized arrears or added the arrears to the total mortgage balance. This resulted in overpayments as the tracker interest rate applied by KBC was too high.

If the affected customers opt for a higher level of legal protection, their mortgage balance will increase overall. The bank is offering affected customers up to €500 to get independent financial or legal advice on what to do.

Customers also have the option of using the bank’s internal complaints procedure.

In 2020, the central bank fined KBC 18.3 million euros. KBC has had to pay 153.5 million euros in refunds and compensation to 3,741 customers who have been affected for more than a decade by being unfairly denied cheap loans at the ECB’s interest rate.

The central bank’s enforcement director, Seána Cunningham, said her investigation “showed that despite having had several options to remedy the damage it had caused its customers over an extended period, KBC steadfastly refused to accept its mistakes”.

“KBC’s actions in this regard, including failing to comply with the (Tracker Mortgage Inspector’s) stop-the-harm policy, were simply unscrupulous,” Ms Cunningham said.

https://www.independent.ie/business/personal-finance/banking/kbc-admits-to-error-in-calculating-tracker-mortgage-redress-payments-41888607.html KBC admits an error in the calculation of mortgage rebate payments

Fry Electronics Team

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