Thousands of Ulster bank mortgage customers are due to a refund after they were overcharged by the bank. This follows similar situations at permanent TSB and other financial lenders. The most recent findings came about due to internal checks by the bank.
This latest error was discovered when the bank investigated tracker mortgage overcharging. But these new findings are related to the banks fixed-rate mortgages.
Findings and compensation
Close to 10,000 customers have been affected. The bank stated that an average refund was being issued to the tune of €2300. The bank has also stated that they will issue compensation in regards to the error.
Meanwhile, other customers were charged too little. Of these, the bank will not seek repayment.
The fixed price error occurred when customers were placed on different rates than those they applied had for. The average difference in interest rates over the affected period was 0.37pc.
Although the bank was entitled to apply the most up-to-date rates they did not make this clear to their customers at the time.
The period of the error was between 2001 and 2008. The overcharging lasted roughly two years, but no complaints were made by customers as they did not notice the error. This latest news was widely broadcast by both RTE and the Irish Times both of which have continued their long coverage of the banking sector
Deputy chief executive at Ulster Bank Paul Stanley said: “As part of a review of our mortgage book, Ulster Bank has identified a historic error that has affected our customers. Some customers have benefited, but unfortunately, other customers have been negatively affected.”
“For those customers who have benefited we will not be changing anything, and they will keep the benefit.
He continued “For those customers who have been negatively affected, we are currently in the process of writing to them to apologise, explain what it means for them, and provide them with refunds and compensation,”.
Earlier this year Ulster Bank said it was to repay 23,000 business customers after finding it had charged them the wrong fees.
Although Mr Stanley was not forthcoming with how much the total cost would be to the bank, he did admit that €167 million had been set aside for both the overcharging and business related errors.
Action to be
The bank has said that customers do not need to take any action and will be contacted by the bank if affected.
“Customers do not need to take any action – we will write to them if they have been negatively affected,” the bank chief said.
They have announced compensation which will vary but should average around €500 per affected customer. They have stated that the aim to have addressed this issue and its tracker mortgages
Tracker mortgage scandal
This latest announcement is just one new discovery in a long list of scandals to hit the financial sector in recent years. The tracker mortgage scandal has affected numerous banks including AIB, Bank of Ireland, Ulster Bank, Permanent TSB, KBC Bank.
Up to 40000 people have been affected by the issue. This varied from people being incorrectly charged to being denied mortgages altogether.
A February report from the Irish Times noted that banks had set aside almost €1 billion in order to meet compensation and redress claims.
The Central bank said it hoped that the vast majority of those effaced will be notified and compensated by December 2019. The three-year-long probe has been the biggest conducted by the Central Bank. They have stated they will pursue mortgage lenders until they are satisfied with the results.
The latest revelations from Ulster bank will
The annual report from the ombudsman released this week show that mortgage and insurance matters account for almost 2/3 of all complaints made to the office.
There was almost 1700 mortgages related cases heard with permanent TSB, AIB and the bank of Ireland coming under particular scrutiny.
Some of these findings were reproduced in the Irish Examiner and show the huge array of finaical institutions under continunig scrutiny.
Ulster banks willingness to admit mistakes in regards to their fixed mortgages rates and to assist customers will most likely be welcomed by the Central bank and their affected customers.