Permanent TSB (PTSB) needs to act swiftly and compensate around 2,000 customers who were wrongly denied a tracker mortgage rate, according to Fianna Fáil Finance Spokesperson Michael McGrath.
In February, the bank withdrew a Supreme Court appeal against a High Court decision which upheld a decision of the Financial Services Ombudsman in favour of bank customers. The background to the issue is that the bank refused to allow certain customers who had switched from a tracker rate mortgage to a fixed rate mortgage for an agreed term to revert to the tracker rate mortgage at the end of that term on the basis that the customers had come off the fixed rate early.
Deputy McGrath stated, “It is now over two months since PTSB withdrew the Supreme Court appeal and essentially held its hands up on this issue. It is estimated that 2,000 mortgage holders were wrongly denied a tracker rate when they came off their fixed rate and, as a result, ended up paying thousands of euro in additional interest. I have raised this issue in the Dáil with Minister Noonan and directly with the bank. I know that some customers were overcharged tens of thousands of euro in interest as the wrong rate was applied. Some customers have been pursuing this issue for up to five years.
“A number of things now need to happen. The bank needs to contact all the customers affected by this issue and immediately put them on an appropriate tracker rate. The bank needs to repay these customers all the additional interest they were wrongly charged on their mortgage. The customers should also be compensated by the bank for being treated in this manner. Furthermore, the Central Bank needs to use its enforcement powers to ensure there is an adequate deterrent in place to prevent issues like this happening again.
“PTSB is now looking for people to invest in the bank as it seeks a sustainable path to recovery. I wish the bank well in that regard as I believe it is vital that PTSB’s future is secured, enabling the bank to provide badly needed competition in the Irish market. However, if the bank is to attract the investment it needs, it must demonstrate that it will act swiftly when it becomes clear that it has treated its own customers badly. The bank needs to seize this opportunity and proactively deal with this important legacy issue affecting around 2,000 customers.”