BoI to compensate 6,000 additional tracker customers

Updated / Thursday, 9 Nov 2017 18:46

The newly identified mortgage holders are in addition to 4,300 previously highlighted customers at Bank of Ireland

Bank of Ireland is to compensate 6,000 additional tracker mortgage customers, the company revealed today. 

The development follows huge controversy over banks that wrongly moved customers from the low-interest loans.

The 6,000 additional customers will all be paid compensation. 

The newly-identified mortgage holders are in addition to 4,300 previously-highlighted customers. 

Among those being returned to tracker rates are approximately 1,800 of the bank's own staff. 

The bank also said it will be making an additional provision of between €150m and €175m for redress and compensation for the additional 6,000 accounts.

This is in addition to an initial €25m set aside by Bank of Ireland last year to deal with the scandal.

Explainer: The tracker mortgage scandal

In a statement Bank of Ireland CEO Francesca McDonagh said: "I unreservedly apologise to all impacted customers for the financial loss and anxiety this has caused them and their families."

The bank has also decided to move 3,700 of the previously identified customers to a lower tracker rate than they had been offered earlier.

In response to the developments, the Central Bank said: "As the Governor of the Central Bank has previously made clear, we will continue to challenge all lenders on disputed cases. This approach gets money back faster to people affected."

The Central Bank also said that the overall number of affected mortgage customers across all banks will increase as a result of today's statement.

Fianna Fáil's finance spokesman Michael McGrath has said it's "quite stunning" that one of the pillar banks has identified an additional 6,000 affected customers.

Speaking on RTÉ's Drivetime, he said staff at the bank affected were in an invidious position all along.

"They felt they were in a very difficult position because their job and their livelihood was dependent on the bank and I can only hope that today's statement by Bank of Ireland represents a step-change in their approach," he said.

Mr McGrath said there is a new CEO of the bank and it is yet to be seen whether there has been a fundamental change, describing the handling of the controversy so far as "appalling".

A financial adviser who has run a long campaign aimed at seeking redress for thousands of customers wrongly moved off their tracker mortgages, has said the latest development is 'staggering' and he feels vindicated by it.

Speaking on RTÉ’s Six One News, Padraic Kissane said the Central Bank has to be acknowledged for increasing the scope of its inquiry and getting results.

He said the inquiry is now working and has led to a major bank doing a U-turn on the matter.

Mr Kissane said prior to today Bank of Ireland’s position had been one of resistance, but under Chief Executive Francesca McDonagh the bank had changed its attitude.

He said he was asking for a long time about staff who were customers of the bank as well as employees, who were placed in a very precarious position.

Mr Kissane said he believes more than 30,000 people in total are affected across a number of banks and he hopes other banks will follow suit.