PTSB announces compensation programme for failed tracker customers
Permanent TSB, which was bailed out by taxpayers, has admitted “deeply regrettable” overcharging and wrongdoing on more than 1,300 mortgage accounts.
It says PTSB also failed to inform some other customers of their right to be offered a tracker rate at the end of any fixed rate period.
It follows an enforcement investigation by the Central Bank, which identified significant failures by Permanent TSB, and its subsidiary company Springboard Mortgages, associated with tracker mortgage options and rates.
The customers impacted include 1,152 PTSB loan holders and 220 Springboard Mortgage Limited customers.
The Central Bank has now ordered the bank to put in place a comprehensive redress and compensation programme and impacted mortgage customers of both PTSB and Springboard Mortgages will receive letters over the next two weeks.
PTSB said consequences of its failures may have included some customers having to make higher repayments than they should have, some going into arrears and some becoming engaged in legal proceedings that may not otherwise have been necessary.
The bank said that after a review by Permanent TSB and Springboard, 22 of those people may have avoided losing their properties if the failures not occurred.
The key elements of the Mortgage Redress Programme are: rate change, redress, and compensation.
The parties complained to the Financial Services Ombudsman, William Prasifka, who found that the bank had erred by not providing the customers with sufficient information about the consequences of breaking their fixed rate early.
Alan Cook, chairman of Permanent TSB, and Jeremy Masding, chief executive, said they “apologise unreservedly” for the very serious consequences of the bank’s failings. “We are truly sorry this has occurred and our absolute focus now is on correcting the position of every impacted customer as speedily as possible”.
“Our first priority has been to address the customer detriment by requiring permanent tsb to put in place a customer focussed redress and compensation programme”.
The Central Bank has also required that a reduced interest rate be applied by Permanent TSB to all relevant impacted customers’ accounts as an interim measure.
“We encourage impacted customers to consider their letter of offer and options carefully”.
PTSB had initially refused to allow certain customers who had switched from a tracker rate mortgage to a fixed rate mortgage for an agreed term to revert back to the tracker rate mortgage – on the basis that the customers had come off the fixed rate early.
Permanent TSB and Springboard will be writing to all impacted customers over the next two weeks to outline the redress and compensation offer specific to their circumstances.