Bank of Ireland fined €100.5m over tracker mortgage scandal

ireland
Bank Of Ireland Fined €100.5M Over Tracker Mortgage Scandal Bank Of Ireland Fined €100.5M Over Tracker Mortgage Scandal
Issuing the fine, the Central Bank said Bank of Ireland’s failures "resulted in the loss of 50 properties, including 25 family homes". Photo: Getty Images
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Updated: 11.45am. Additional reporting by Reuters.

Bank of Ireland (BOI) has been fined a record €100,520,000 by the Central Bank for overcharging customers denied mortgages that track base rates.

The fine is in respect of 15,910 tracker mortgage customer accounts which were impacted between August 2004 and June 2022, the Central Bank confirmed.

The investigation found that 50 properties, including 25 family homes, were lost by impacted customers due to the bank's failings.

BOI is the final lender to be reprimanded in the investigation into tracker mortgages, with AIB and EBS previously receiving a €97.7 million fine in relation to the matter.

In March 2021, Ulster Bank was fined almost €37.8 million, following on from similar charges for Permanent TSB (€21 million) and KBC Bank Ireland (€18.3 million) for their part in the industry-wide scandal.

Fines totalling €279 million have now been issued to banks for failing to offer a mortgage which tracked the European Central Bank rate that had been at or close to zero for almost a decade.

BOI had set aside €120 million by the end of June to cover any additional costs arising from the probe.

In a statement, the bank admitted that what took place was wrong and should never have happened, apologising to those impacted.

In a statement issued following the announcement, the Central Bank said it determined the appropriate fine to be €145.6 million, which it reduced by 30 per cent "in accordance with the settlement discount scheme provided for in the Central Bank’s ASP (Administrative Sanctions Procedure )".

The statement added that BOI has already paid €184.4 million to impacted customers identified prior to and as part of the Central Bank investigation.

"The investigation found that Bank of Ireland failed in its obligations towards its customers under the European Communities (Unfair Terms in Consumer Contracts) Regulations, 1995, the Code of Practice for Credit Institutions, 2001 and the Consumer Protection Codes 2006 and 2012.

"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," the Central Bank added.

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I'm not sure there can be any fine adequate or large enough to capture the utter human misery, stress and devastation that these actions by banks in our country caused.

Commenting on the announcement, Minister for Further and Higher Education Simon Harris, who was minister of state in the Department of Finance in 2014-2016, welcomed the fine.

"I'm not sure there can be any fine adequate or large enough to capture the utter human misery, stress and devastation that these actions by banks in our country caused - people losing their family home, people losing their property, the mental health pressures that people were put under - so I welcome the fact that there is a large fine."

The Minister added that he had spoken to people from his own constituency who were affected by the issue, recounting their "utter devastation".

"I think it speaks of a time though, and I certainly hope it speaks of a time in banking that we'll never see again.

"I think there have been an awful lot of changes in Ireland and in Europe around banking rules. I think there is change ongoing around banking culture and I think that is really important," Mr Harris said.

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