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BANK OF IRELAND has been hit with a record €100,520,000 fine by the Central Bank for its role in the tracker mortgage controversy.
The Central Bank has sanctioned the company for denying thousands of its customers access to cheaper tracker mortgages.
It said today that the reprimand was issued for a series of significant and long-running failings in respect of 15,910 tracker mortgage customer accounts which were impacted between August 2004 and June 2022.
Bank of Ireland admitted in full to 81 separate regulatory breaches.
The regulator determined the appropriate fine was €143,600,000,1 which was reduced by 30% to €100,520,000 in accordance with a settlement discount scheme.
“This is the largest fine imposed to date by the Central Bank and is in addition to the more than €186,400,000 Bank of Ireland has already paid to impacted customers identified prior to and as part of the Central Bank’s Tracker Mortgage Examination,” the Central Bank said.
Bank of Ireland’s failures resulted in the loss of 50 properties, including 25 family homes, which would have been avoided if Bank of Ireland had complied with the most basic and fundamental of its consumer protection obligations.
Apology
Bank of Ireland apologised to customers for its wide range of failings, particularly those that led to customer harm and detriment, and for the length of time it took to recognise and resolve the issues.
The financial firm noted that its regulatory breaches included the provision of unclear contractual documents to customers, failure to interpret these unclear documents in customers’ best interests, unfair complaints handling, deficient mortgage systems and controls, and wrongful exclusion of customers from the protections of the Tracker Mortgage Examination.
Bank of Ireland’s Interim Chief Executive Gavin Kelly said: “Today’s statement from the Central Bank of Ireland is extremely critical of Bank of Ireland. We understand – and fully accept – why this is. What took place in relation to tracker mortgages was wrong. It should never have happened. We are very sorry that it did.
“We unreservedly apologise to all customers harmed by the tracker mortgage issue. The impacts were significant and wide reaching, up to and including loss of homes in the most serious of cases,” Kelly said.
The Irish Banking Culture Board (IBCB) said today is a milestone day for the Irish banking sector, its customers and its stakeholders.
“It is essential that today’s announcement acts as a book-end to the unacceptable behaviour and culture within banking which contributed to the tracker mortgage period, and that the issues identified by the Central Bank of Ireland (CBI) are not forgotten, but rather act as a source of ongoing motivation for lasting cultural and behavioural change,” it said.
Investigation
The fine follows an enforcement investigation by the financial regulator that has been ongoing for six years.
The tracker mortgage controversy saw tens of thousands of 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.
In many cases, the overcharging ran into tens of thousands of euro – in the worst cases people lost their homes as a direct result of the bank’s action.
The Central Bank has already slapped major fines on other lenders for their part in the industry-wide scandal.
In June, AIB received a fine of €83.3 million while EBS received a fine of €13.4 million. for their part in the scandal.
In March of last year, Ulster Bank was fined almost €37.8 million, Permanent TSB was fined €21 million in 2020 and KBC Bank Ireland was fined over €18.3 million.
The IBCB noted that the fine imposed today brings the cumulative fines imposed on the five Irish retail banks to €272 million.
“These fines are unprecedented and reflect the gravity of the CBI’s findings, however, as previously noted by the IBCB, it is essential that the human cost of the tracker mortgage related failings by the industry is not overshadowed by the size of the CBI fines and the costs of redress,” it said.
“In many instances this human cost is impossible to quantify, particularly given the financial impact coincided with the wider national and global economic crashes with resultant negative income consequences for many.”
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None of this will change until these people start seeing real jail time.
@G Row.: The reporting doesn’t even call it what it was. Their “role in the tracker mortgage controversy” was that they were deliberately and knowingly defrauding customers. Jail time will remain an absolute fantasy until the nation sheds it’s unhealthy obsession with maintenance of the status quo and stability, not just in government and media, but in the general public as well
@Brendan Gordon: Totally agree with you, way beyond time people woke up.
@G Row.: Absolutely. Also, don’t worry they’ve recouped this several times over or will do before very long. It’s their customers that will end up paying it. It’s an absolute disgrace, how many homes were lost because of this and how many people took their lives due to the pressures ? We’ll never know. A fine is inconsequential to the bank. Human lives worth very little in the scheme of things. Disgusting
@Declan Moran: Our betters, apparently.
@G Row.: Pascal Donahue pass some kind of law that bankers will NEVER go to jail!! I mean what does that tell you.
@Colette Kearns: It tells me not to vote for them.
@Colette Kearns: It tells me that there is no difference between a banker in his white collar engaging in robbery/corruption and a thief conducting a bank heist wearing a mask. People committed suicide over their dealings with these thieving banks.
@Frank Cauldhame: The thief wearing the mask might see jail time plus you would have all the usual guys on about the death penalty, flogging and taking their dole off them.
The banker of course is above all that.
Time for this shyte to change.
I’m sure the execs will be devastated. Money they made from the Irish public is now in public coffers. When will people be arrested, jailed, and set as a criminal? This doesn’t affect the people behind these decisions.
@Sean Stevenson: 1.3 billion profit last year. €419m profit in the first half of this year. They wont be too devastated, especially getting away with just a fine….. Individual accountability legislation hopefully brought in by the end of the year. https://www.arthurcox.com/knowledge/the-central-bank-individual-accountability-framework-bill-2022/
Shocking to think the fact that families lost their homes and the people responsible for this scandal are not being held to account for it. Slapping a fine on the banks should be the tip of the iceberg with criminal proceedings to follow.
@Paul Linehan: not alone did people lose their houses. Some even lost their life.
… they will laugh at this relatively paltry sum & continue to plot how to maximise profits at customers expense!
Give d fine back to d people
@Pat Andrews:
Read the article in full.
@Pat Andrews: there’s a redress scheme for all these that the banks have to pay for. The amounts contain a bonus amount to compensate for the time and stress, but for many it’s too late and it doesn’t really give back all that was loss and what stresses were placed on families. It was all totally needless and was only for short term gain. White collars shouldn’t be a protection from criminal charges.
I still don’t know what a tracker mortgage is ..
Paid by our “temporary”U.S.C no doubt.
Banks in Ireland are the real government. They do whatever they want.
Ahh banks. 100 mil is pocket change and not a charge sheet in sight. Oh, we are very sorry we made 50 families homeless illegally. Shove it. They should have a collective law suit snd hold those criminals responsible. A fine is not enough
6,650 euro per mortgage scammed. Not enough in reality.
Pass on to those affected.
@l:
€186m was already paid to effected customers by the bank. This €100m is a fine from the regulator.
@iohanx: €286m fines and nobody responsible. Is that OK?
@iohanx: I’m aware. Not nearly enough. Pass it on to those mentioned.
Explains why the state sold off their shareholding last week
We are living in a Gangsters paradise…
@Kerry Evans: We’ve been spending most our lives there
This will just be passed down to the customer as an increase in charges
The owners of the properties should be rehoused using the monies from the fines incurred & the management of the BOI should be charged with embezzlement.
Absolute disgrace ! Remember a guy a few years back getting a 4/5 year sentence for avoiding tax on garlic , County Louth I think .
Typically Irish and embodies the last 101 years of FG / FF governing.
So how much did they save by denying customers to lower rates compared to the fine????
@Jim Buckley Barrett: 186million it appears
@Jim Buckley Barrett: Nothing, that money was repaid. The fine is extra
@Jim Buckley Barrett: the top bankers got bonuses and left, the bank got nothing as its all paid back.
@SPQH: bonuses are taxed at 90%, so in fact the state got any benefit from the bonuses
@Mark: nice angle
@SPQH: ;)
For over 50 years I have hated the banks and said so regularly. My family and friends would have a laugh when I did.
They are not laughing any more.
Will this fine be passed on to customers ?
How will this money benefit the people who lost their homes?
No doubt they will pass it onto the public. A vile bank.
This is a total crime and instead of jail time they get free money from the tax payer and a pay rise
Take back the old parliament building in college Green too
If they’re not locked up behind bars, then at the very least, the sociopaths responsible for the scandal should be publicly named and shamed. Let them feel the full brunt of anger and hatred that they so richly deserve.
So will the exchequer see any of this money…
That lad on the top floor of the bus is vindicated.
People didn’t just lose money or houses. A relative worked on the auditing of the tracker accounts and ended up changing jobs as severe depression set in from talking to affected customers. Many lost their marriages and relationships. Families split up and sofa surfing but worst of all were the calls where relations had lost loved ones to suicide due to the stress the banks put them under. My relative could have been next but luckily got out on time. It impacted everyone who dealt with those poor people.
The Bank of Ireland fine has to be paid after the Tax is paid, profit .
The fine has to be paid after the Tax is paid, profit .
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