The role of the Central Bank and the Permanent TSB in the mortgage interest overcharging scandal must be probed by the Oireachtas Finance Committee, according to Committee member and Fianna Fáil Finance Spokesperson Michael McGrath.
Deputy McGrath wrote to the Finance Committee earlier this week suggesting that a series of hearings be held into the issue.
Deputy McGrath stated, “Almost 1,400 mortgage customers have been scandalously treated by Permanent TSB and its subsidiary company Springboard Mortgages. This arises from Permanent TSB’s failure to inform some customers of the consequences of their decisions to break early from a fixed rate or discounted tracker period, and the failure to inform some other customers of their right to be offered a tracker rate at the end of any fixed rate period. This resulted in some customers falling into arrears on their mortgage or even losing their home while many others overpaid thousands of euro on their mortgage as a result.
“Revelations in the today’s Irish Independent that the Financial Services Ombudsman wrote to the Financial Regulator as far back as 2009 asking that the office investigate whether banks were trying to remove tracker rates from mortgage holders raise serious questions about the tardiness of the Central Bank in dealing with this vital issue of consumer protection. In addition, the manner in which PTSB has dealt with this overcharging scandal raises questions about the suitability of CEO Jeremy Masding to continue in office. After losing at the High Court and having rulings against it by the Financial Services Ombudsman on this issue, the bank continued to procrastinate and deny customers the tracker rate they were entitled to.
“The fact of the matter is the bank was prepared to take the issue to the Supreme Court until a Central Bank investigation forced it to put its hands up and introduce a mortgage redress scheme for affected customers. This approach is simply not good enough as far as I am concerned. While we await the outcome of the formal Central Bank investigation, I believe it is vital that the entire scandal is examined in detail by the Oireachtas Finance Committee. Such a probe would include an examination of the origin of this problem, the role of the Central Bank and PTSB in dealing with it, whether it has wider application to customers of other banks, the effectiveness of the redress scheme that has been put in place by PTSB for their customers and other related issues.”