Credit, collections & insolvency news
Irish regulator, The Central Bank of Ireland, has fined Ulster Bank €37.8 million (€37,774,520) for its role in Ireland’s tracker mortgage scandal. The Central Bank of Ireland issued the penalty after finding that 5,940 people were denied tracker mortgages, resulting in “significant and widespread overcharging”.
The Central Bank’s investigation found that the Bank had breached its regulatory obligations towards its impacted tracker customers, most notably those under the Consumer Protection Codes 2006 and 2012.
Ulster Bank has admitted in full to 49 separate regulatory breaches. The fine and reprimand imposed are in addition to the more than €128 million that the Bank has been required to pay to date in redress, compensation and account balance adjustments to all impacted customers as part of the Central Bank’s Tracker Mortgage Examination (TME).
The TME was established as an industry-wide review in 2015 by the Central Bank to ensure that lenders were providing tracker customers with their tracker mortgage entitlements and to address any circumstances in which they were not.
The Central Bank determined that the appropriate fine was €53,963,600, which was reduced by 30% to €37,774,520 in accordance with the settlement discount scheme provided for in the Central Bank’s ASP.
The Central Bank’s Director of Enforcement and Anti-Money Laundering, Seána Cunningham, said“At the heart of this enforcement action is the avoidable harm caused by UBID to its tracker customers. Over an extensive period, UBID denied customers their tracker mortgage entitlements in relation to 5,940 mortgage accounts, resulting in significant and widespread overcharging. At the most serious end of the detriment caused to UBID’s customers, 43 properties were lost, 29 of which were family homes, as a direct consequence of UBID’s actions.
“Our investigation identified the numerous opportunities that UBID had to do right by its customers and the efforts that UBID went to in order to evade its obligations to these customers. Despite it being clear to UBID from customer complaints that certain customers were paying more for their mortgage than they should be, UBID continued to deny customers the lower tracker rates that they were entitled to. In deciding in 2011 to only return customers who complained to their tracker rates, UBID calculated the cost of returning all impacted customers to their tracker mortgage rate. Instead, informed by that financial analysis, it decided to take the option that cost it the least and return only customers who complained to their correct rate. Having initially provided its customers with unclear information and having failed to warn them of the very real consequences of their mortgage-related decisions, UBID put further impediments in its customers’ way. The onus was placed on customers to complain, and to do so in a certain way, in order to get what they were entitled to. Ultimately, UBID only did right by its customers following intervention by the Central Bank. It is unacceptable for any regulated entity to treat its customers in this way.”
“The Central Bank will intervene where firms seek to evade their obligations to consumers. Where firms cause serious harm to their customers, in circumstances where there were repeated opportunities available but not taken to rectify and remedy this harm, this requires an appropriate and deterrent sanction. The fine imposed by the Central Bank today should serve as a clear message to the wider market of the importance of compliance with the fundamental requirements of the Central Bank’s Consumer Protection Codes and of taking prompt action to address issues comprehensively and fully when they are identified. It is the responsibility of each firm to ensure that in all its dealings with customers it acts honestly, fairly and professionally in the best interests of its customers. Firms must take this responsibility seriously and put it at the heart of their actions and decision making.”