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PERMANENT TSB HAS been reprimanded and fined a record €21 million by the Central Bank for regulatory breaches affecting tracker mortgage customers.
The €21 million fine was handed down under its Administrative Sanctions Procedure in respect of “serious failings to 2,007 tracker mortgage customer accounts which were impacted for the period between August 2004 and October 2018.
This figure reflects a gross fine of €30,000,000 reduced by 30% to €21,000,000 in accordance with the early settlement discount scheme provided for in the Central Bank of Ireland’s Administrative Sanctions Procedure.
In addition, PTSB has also been required to pay €54.3m redress and compensation to its impacted customer accounts.
The tracker mortgage controversy saw customers being overcharged by their lenders when they were either denied a tracker rate they were entitled to, or charged the wrong rate of interest on their mortgage.
This fine is the largest imposed to date by the Central Bank under the ASP. It said the hefty fine reflects “the gravity with which the Central Bank views PTSB’s failings and the unacceptable harm PTSB caused to their tracker mortgage customers”.
In a statement today, the Chief Executive of Permanent TSB, Jeremy Masding said:
On behalf of Permanent TSB, I apologise unreservedly to all customers affected by the Tracker Mortgage issue, and for the distress caused as a result.
Masding added that “building on the lessons learnt from this issue, Permanent TSB has invested heavily in enhancing the organisation’s risk management and control environment”.
‘Failed in their obligations’
The Central Bank’s investigation into PTSB’s tracker related issues, which was conducted alongside its Tracker Mortgage Examination (TME), found that the bank had denied its customers a tracker mortgage or did not put them on the correct tracker rate resulting from a number of failings.
According to the Central Bank, PTSB has admitted in full to 42 separate regulatory breaches of the Code of Practice for Credit Institutions 2001 and the Consumer Protection Codes 2006 and 2012.
The breaches occurred broadly in the following ways.
The Central Bank’s Director of Enforcement and Anti-Money Laundering, Seána Cunningham, said that the investigation into PTSB found that they had “failed to put their customers first, with distressing and, in some instances, devastating consequences”.
PTSB failed in their obligations to do the right thing by their customers. In doing so, they broke the trust of their customers and damaged the public’s confidence in PTSB.
“At a minimum, customers should be provided with clear and timely information and warnings about their mortgage, the highest levels of customer service and a commitment from their lender to put things right promptly and fairly should they go wrong.”
Cunningham warned that where firms fail to protect their customers’ best interests, the Central Bank’s response will be “robust and the consequences will be serious”.
Appearing before the Oireachtas Finance Committee in April, PTSB’s Masding said that bank should be fined by the Central Bank, stating that the bank would engage with the Central Bank as to the scale of the fine.
“The fine will be as it should be and we will pay it as it should be,” said Masding.
He also told the Committee that no one had lost their job in the bank over the scandal, stating that it was found the error was “not a deliberate action” but was a lack of control and oversight by the bank.
With reporting from Christina Finn
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And we all know who’s gonna pay for this!
@Danny Gormley: They have already raised their rates in anticipation.
@Mick paisley: and I for one will be closing my accounts. 50% increase.
@Mick paisley: nothing stopping anyone switching mortgage providers.
@Danny Gormley: You said it. Account joint account monthly fee gone from €4-€6!!!
@Joseph Blocks: i agree as i have switched. But being ‘fixed’ probably does.
I have sympathy for ptsb. They probably didn’t know what a tracker mortgage was.
@Yurty Tim: :)
@Yurty Tim: Oh yes they did and what
“executives” were responsible for the
execution ,and no doubt Flanagan &
Donoghue will bring them to justice
Rates on current accounts changed in anticipation. And a letter today that their explore account fees have gone up. What is even the point in fining them unless in conjunction you can freeze their rates and charges.
@Seaniecp: Exactly. Get a fine for fleecing your customers ? No problem. Just fleece your customers a bit more to pay the fine.
Does anyone know where the money they are fined goes to?
@John Horan: exchequer
@John Horan:
Unfortunately, it doesn’t go to those affected.
@sequoia: those affected got compensation
@thomas patrick: Not properly, case is still ongoing. If you should have been on a tracker but your contract didn’t state whether it was .9 or 1.1% above ECB, PTSB when they got caught out went back to customers and apologised and compensated customers at a “tracker” rate of 3.25% above ECB. They have ruined a lot of people’s lives, they did it knowingly, and even after being caught out have continued to mess the affected customers about with this 3.25% rubbish.
@thomas patrick: People who lost their homes because of PTSB are still homeless.
@John Horan: it will not go to who deserves it most the Costuners
@Matt Connolly: known fact or are you just speculating?
@John Horan: Central Bank is self financing. Surplus goes to the exchequer every year. This year was unusually high, but typically about €200m.
@thomas patrick:
I’m one of those. I got €3,000.
They consider that enough to cover them for:
An organised attempt at fraud
Harassing phone calls (up to 5 per day, daily)
Letters of demand every week (sometimes twice a week)
Loss of employment & a miscarriage due to stress
Threat of evection on several occasions
Having to borrow constantly from family to get by.
Kids having to go without what should have been a decent standard of living.
At one point, my mortgage payment had risen to over 114% of what they should be (fraudulently).
I was just over €10k in arrears with them & paying as much as I could and they kept increasing the rate.
In the end they returned what they had stolen from us, it was €40,000.
This wasn’t a mistake or an error or a system problem. This was fraud.
@Matt Connolly: So when the Central Bank issues a fine it goes firstly to their own coffers?
@sequoia: no fraud you absolute spoofer. Please present any evidence of fraud to the Gardaí.
@John Horan: it’s a public body.
@TheTrustedChalice: sequoia has accurately stated the way the banks operate when they have someone in their sights for eviction. No engagement, just constant harassment and threats. They set out to break people. Such is the harassment most never turn up in court when summoned. Many have committed suicide. Many are in bad health with huge medical bills. All be cause of bank greed.
And once again in your total ignorance all you have to offer are insults.
@Matt Connolly: bit of a politician’s answer there. So I take it that yes when they issue a fine it goes firstly to their own coffers and then on to the income line in the government accounts. Seems like a small fine given what they have done and PTSB’s ability to pay. I know that the fine cannot jeopardise the financial security of a bank but ultimately the govt as owners of PTSB are fining themselves.
I’d say small change and even less sacrifice than some of their former customers endured.
Should be ten times that at least. Toothless regulator
With an operating income of ~4-500 million, this is a sizeable fine for once! Here’s hoping those damaged by the scandal can recover fully.
@Sean Murphy: 4% fine so
Explains why they raised their rates to the highest quarterly maintenance charge equaling €72 per annum, bye bye TSB. Hello KBC!
@Angry Steve: just keep at least €2500 in your account at all times and you don’t have to pay any charges.
@Hank Kingsley: but if you kept that 2,500 in an investment earning on average 4% per annum it would be a lot more valuable in the long term than €72 per year …
@Dara O’Brien: I do that, too. I’m just stating how to avoid the charge.
@Hank Kingsley: I have well over that and I got the letter today that it has changed from 4€ to 6€. Nothing saying 2500€ in bank
Is that all??
We’ll pay the fine..thanks Fine Gael,your time is coming to an end.At least the other lot look me in the eyes while riding me
Should be given to customers effect.
That’s only the tip of the iceberg , they way they have sold off loans regardless whether they were poorly performing or performing well doesnt seem to bother them.
The so called ‘Consumer Protection Code’ that they and all other lenders are supposed to abide by is a sham.
When it suits them they cherry pick which parts they want to implement and other parts that have the customers interest at heard the conveniently ignore.
These ‘voluntary ‘ codes are a joke. Selt policing doesn’t work.
Tom
@Tom Poynton:
Performing loans (ie. those meeting full monthly repayments as per original contract) are how banks make their money – why on earth would they sell them on? That would be like a shopkeeper selling their best-selling stock to a competitor at knockdown prices.
@The Great Unwashed: Charlie Weston’s mortgage was sold on, not by ptsb but by another bank, and he never owed a red cent on his repayments. The banks don’t care, they just want to clear their books, and the human cost means SFA to them.
https://www.independent.ie/business/personal-finance/property-mortgages/charlie-weston-the-day-the-vulture-funds-came-for-me-36639042.html
Does the money go back to the people who were fleeced?
Ouch.. For the customer…
Fines for big business…….imprisonment for citizens Mary and Joe
Explains why they raised their rates to the highest quarterly maintenance charge @ €72 per year last week, bye bye TSB. Hello KBC!
To be fair the actions they took were believed to be legal at the time and it was a judgement that suddenly changed it to illegal. Some of the customers were well aware they would lose their tracker but they now get compensation due to the ruling. You can even go back and look up financial advice warning people how they would lose tracker mortgages.
If the ruling had gone the other way in that one case they wouldn’t have had to pay. It isn’t simply they went to RIP off customers as people think
@Craic_a_tower: was it maybe then a ploy all along that they would lose their tracker and get fleeced and then legislation was brought in to stop the scam?
@Bruce van der Gutschmitzer: there was no legislation change it was a case that determined how the law should be applied. It was deemed to be clear that all banks followed the same belief and one judgement changed that. Let’s be clear people were told they would lose trackers by redoing their mortgage and they are being given compensation as if they were never told. It was common knowledge trackers were valuable and changing your mortgage or not paying put it at risk. Things like this stop competition in mortgages in Ireland as the consumer is always given the break meaning extra risk.
“I don’t know what a tracker mortgage is “
@d: cool story D.
And nobody gets Sacked, what a joke,
Why aren’t individuals held to account rather than a business wide fine?? These decisions were made by egotistical clowns.
@Tony Murphy: “He also told the Committee that no one had lost their job in the bank over the scandal, stating that it was found the error was “not a deliberate action” but was a lack of control and oversight by the bank”.
The above is a cop out. Someone took the deliberate decision to commit the Tracker fraud. Whoever, or those responsible should be in jail.
@Dave Doyle: again Dave you are also an imbecile. If there was any suggestion of fraud there would be criminal proceedings.
@TheTrustedChalice: THere were no criminal proceedings ever intended for this fraud, and there never will. You’re talking about the sacred banks and sacred bankers.
Name calling is the hallmark of Leo’s little boys sent on here to insult people. You’re just one more FG shill with nothing to offer but insults.
Ridiculous, they should be done for fraud,any other business or individual committing fraud would be in prison, this decision is the reason the public have no trust in banks,government, GDA, or the judiciary.
Another bailout will cover this easily
PTSD post PTSB
21 millions is nothing for them. It’s just a slap…
Whatever the fine it does not bring back those people who committed suicide as a result of all the stress placed upon them, there is no fine sufficient enough to pay for lives and loved ones lost. Heads should roll, financial organizations need to stop recruiting untrained yellow packers !
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