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Niall Carson/PA

Tracker mortgage scandal: Ulster Bank made €100 million by overcharging customers

The bank said it is working to pay back all of this money, but TDs and senators were critical of the progress it has made so far.

ULSTER BANK EARNED €100 million by overcharging its customers over a number of years, it was revealed today.

The bank has admitted it overcharged thousands of its customers, mainly by denying tracker rates with “ambiguities” in its contracts. It has set aside a fund of €211 million to pay back the €100 million it wrongly took from customers and to compensate them for the damage caused.

Two of the bank’s officials, chief financial officer Paul Stanley and head of corporate affairs Elizabeth Arnett appeared before the Oireachtas Finance Committee today for a grilling about their progress. Their CEO Gerry Mallon, however, was not with them.

Just last week it was announced that Mallon will resign from his role later this year and serve as Tesco Bank’s chief executive in the UK. Stanley told committee members there was precedent for an outgoing CEO not attending the committee.

However, several members were critical of the bank executive’s decision not to appear before them. “He should be here,” Michael McGrath told him.

“It’s unacceptable,” Pearse Doherty said.

“I’d say it’s disgusting that Mr Mallon is not here today,” Senator Rose Conway-Walsh later told his colleagues.

This was not the only criticism the committee had to share with Stanley and Arnett. It has repeatedly called out Ulster Bank for being behind the other lenders in terms of paying back and compensating its customers.

Paul Stanley said the bank wished to apologise to customers and accepted that the bank had made them wait too long to get their money back.

In his opening statement, Stanley acknowledged that the length of time it has taken is “unacceptable”. So far, 1,200 of the bank’s almost 3,500 overcharged customers have been paid back and compensated.

It will be the end of June before all 3,500 are paid back.

Sinn Féin’s Pearse Doherty described the pace of progress in Ulster Bank as “pathetic”, pointing out that fewer than 200 customers had been paid back and compensated in the month of January.

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Compensation

Senator Rose Conway-Walsh also asked about the levels of compensation being offered, telling executives that the average for some of the other banks is 20%.

Stanley said compensation offers range from 12% for a customer who was never in arrears or financial difficulty to 15.5% for those with whom the bank had engaged in legal proceedings.

When asked whether the Central Bank had expressed approval of these compensation rates, he repeatedly said the regulator had “noted them”.

He told Conway-Walsh that there are currently six appeals to this compensation, but 140 customers have asked for appeal packs, so more may follow.

And the number of impacted customers is likely to increase, the committee heard, as Ulster Bank is currently “in engagement” with the Central Bank on other cohorts of accounts.

Stanley said he could not give any time frame for these potential additions.

‘A gun to their head’

Under questioning by Fianna Fáil TD Michael McGrath, the bank’s chief financial officer confirmed 15 customers lost their homes as a direct result of the overcharging.

Six of these were voluntary surrenders and there were also two repossessions.

Only one of the 15 homes has not been sold on by the bank.

michael mcgrath Michael McGrath questioned Ulster Bank officials about customers who lost their homes. Oireachtas.ie Oireachtas.ie

“If someone volunteers, it’s with a gun to their head, to avoid court,” McGrath said.

Stanley said these customers all received a €50,000 upfront payment and the bank is “doing its utmost” to ensure these people can get another house. The largest cheque he has written in these cases is for upwards of €300,000.

Earlier in his opening statement, Stanley had told the committee: “We believe that we have a moral obligation to be fair and to put things right as quickly as possible when we get it wrong.”

jmg John McGuinness pulled no punches as he told witnesses their bank needs to start treating customers better. Oireachtas.ie Oireachtas.ie

On his turn to speak, committee chair John McGuinness said Ulster Bank “has a brass neck like no other I’ve ver seen”.

He said the opening statement would have people believe the bank is putting customers first but the large volume of letters TDs and Senators were receiving from their customers would indicate otherwise.

McGuinness read from a number of these letters, including one from a woman who has been waiting 17 months for the bank to rectify her situation. He said she had told the bank of her personal situation, both in relation to her health and finance, in November 2016, with a further meeting in December 2017.

She said she was told she would be treated as a priority. “She then had to write emails to us on 26 January because you didn’t respond.”

“None of what you’re saying here adds up in the context of an example of a batch of emails I have received about how your bank is treating customers.”

If you have been affected by the tracker mortgage scandal, we want to hear your story. Get in touch by sending a message to trackermortgage@thejournal.ie.

Read: Tracker mortgage scandal: AIB did not consider ‘the potential fallout’>

Read: The head of Ulster Bank has been poached by supermarket giant Tesco>

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    Mute BarryH
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    Aug 7th 2024, 1:33 AM

    What about introducing financial penalties along with increased sentences. Criminals paying substantial damages to victims of crime, even if that means seizing their assets or making them, in extreme cases, homeless. Holding parents responsible for their Under 16′s in order to minimise social crime. Violent rioters and social media outlets paying for burning buildings and garda cars etc instead of giving the taxpayer the bill. Hit them where it hurts most, just like they do to ‘victims’.

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    Mute Athena
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    Aug 7th 2024, 10:08 AM

    @BarryH: Not sure how the legal system works in that respect but wouldn’t that be a separate, civil case besides the criminal one to award a monetary fine?

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    Mute BarryH
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    Aug 8th 2024, 1:16 AM

    @Athena: Most of the laws we have in place are leftovers from Brit rule. Irish ?legislators? couldn’t be bothered on updating them to suit modern society and then we have, as far as I can see, data protection rules, that seem to favour the people ie right / left wing criminals and social media sites, that aim to disrupt society instead of protecting society. If the legislators were doing their job they would make ‘exceptions’ to the laws.
    E.G. The Gardai told Instagram to take down the online threats made to Simon Harris and give them the name of the culprit. Instagram replied that that would be in breach of the culprits rights. He is Taoiseach and can ‘ legislate’ Does Simon not think that the common man should be protected more than the criminal?????????
    I want to feel sympathy for politicians who are abused but it is in their hands and their fault. They could save the taxpayer millions in libel cases.

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    Mute Buster Lawless
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    Aug 7th 2024, 12:19 AM

    About time, a huge step forward!!!!

    For heinous cases involving fatalities of course the presiding Judge, having heard all the evidence, should be able to nominate/ sentence with a ‘minimal’ tariff

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    Mute AnthonyK
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    Aug 7th 2024, 6:11 AM

    Life should mean life.

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    Mute Paul Gorry
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    Aug 7th 2024, 1:30 AM

    All well and good going forward,Helen nicely done. Maybe find somewhere to put criminals that get tru the revolving door!!!

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    Mute AnthonyK
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    Aug 7th 2024, 6:11 AM

    And judges should be elected.

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    Mute Paul C
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    Aug 7th 2024, 8:56 AM

    @AnthonyK: they are. We’ve devolved that role to our elected representatives. Or do you mean like the US system which has proven to more about politics then the rule of law?

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    Mute Donna Fallon
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    Aug 9th 2024, 2:18 AM

    @Paul C: Nolan??

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    Mute hans vos
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    Aug 7th 2024, 8:05 AM

    There should be minimum sentecens for a lot more crimes. Now its a toss if you have judge Nolan for a suspended sentence or another one for a much harder punishment.

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    Mute Donna Fallon
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    Aug 9th 2024, 2:21 AM

    @hans vos: Just go online prior to your trial… he’ll prob give you a high five. A disgrace of an individual.

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    Mute Buster Lawless
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    Aug 7th 2024, 12:22 AM

    “minimum”—- not——’minumal’

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    Mute Ger Whelan
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    Aug 7th 2024, 7:43 AM

    @Buster Lawless: you’ll need to tell that to the likes of Judges Nolan and O’Donnell not us.

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    Mute Michael o connor
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    Aug 7th 2024, 1:23 PM

    Ain’t much good if the likes of Martin Nolan won’t even lock them up on normal sentences!!

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    Mute Donna Fallon
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    Aug 9th 2024, 2:19 AM

    @Michael o connor: Don’t get me started… an absolute disgrace that he’s still on the Bar.

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    Mute Keth Tgi
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    Aug 7th 2024, 8:30 AM

    ‘Life incommunicado’ in a communications age. I.e., never again permitted to use a phone, computer or any communication device. In this day and age, that would hurt. And take their shoes too. And toss their hair while you’re at it.

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    Mute AnthonyK
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    Aug 7th 2024, 3:13 PM

    @Paul C: Judges should go before the electorate and show what they did to uphold the law and make the society better.

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    Mute Padraig O'Brien
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    Aug 7th 2024, 1:54 PM

    There’s no need for this, sure isn’t Dublin a safe city!

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    Mute John Smith
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    Aug 8th 2024, 12:13 AM

    We need to build more prisons so criminals can be given proper sentences. Criminals with 50-100 previous conviction should not be walking the streets for a very long time. Also SA sentences in this country are an absolute joke. 8 years for rape is a ridiculous. I don’t blame some women for not reporting these crimes. Also we need far more consecutive sentences.

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