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Overcharging of tracker mortgages

In May 2019, the Central Bank of Ireland fined Permanent TSB for overcharging clients on their mortgages. The Central Bank of Ireland’s investigation found that Permanent TSB did not adequately protect the right of its customers who had taken out tracker mortgages, and as a result suffered significant detriment.

The Central Bank of Ireland found that borrowers should have had the right to ‘tracker’ mortgage rates, contractually tied to the falling ECB interest rate, but that banks insisted customers continue to pay higher mortgage rates. The investigation found that Permanent TSB either denied customers a tracker mortgage or did not put them on the correct tracker rate resulting from a number of failings by the bank. According to the central bank, 2,007 Permanent TSB clients were caught up in the overcharging affairs, which led to 12 customers losing their family homes and 19 investors losing their buy-to-let properties.

The Central Bank of Ireland fined Permanent TSB €21m, the largest regulatory penalty ever imposed in Ireland. Permanent TSB was also required to pay total redress and compensation of €54,3m to affected consumers. Investigations remain ongoing into other banking institutions for similar practices, including Ulster Bank, KBC Ireland, Allied Irish Banks, and Bank of Ireland.