(3 August 2015 – Ireland) The Central Bank of Ireland’s enforcement investigation has resulted in permanent tsb and its subsidiary company, Springboard Mortgages Ltd having to place a comprehensive redress and compensation programme to address problems associated with tracker mortgage options and rates.
The Mortgage Redress Programme agreed to by permanent tsb will address the detriment suffered by 1372 impacted permanent tsb and Springboard customer accounts.
The consequences of these failures are serious and include: mortgage overpayments; mortgage arrears; legal proceedings; and in certain cases loss of ownership of properties, including some homes.
Permanent tsb and Springboard will contact impacted customers by letter over the next two weeks to set out specific details of the Mortgage Redress Programme as it applies to customers’ individual circumstances.
The Central Bank has required that a reduced interest rate be applied by permanent tsb to all relevant impacted customers’ accounts as an interim measure, to allow impacted customers sufficient time to consider their options.
The central bank found during the investigation that permanent tsb failed to inform certain customers of the consequences of their decisions to break early from a fixed rate or discounted tracker period.
The consequences of breaking early was that customers lost their contractual right to be offered a tracker rate in the future (at the time that their fixed rate or discounted tracker period would have ended).
The investigation also found permanent tsb failed to inform some other customers of their right to be offered a tracker rate at the end of any fixed rate period.
In the case of Springboard’s impacted customers, the failure arose from the application of incorrect interest rates to mortgage accounts.
The Central Bank’s Director of Enforcement, Derville Rowland, said: “The Central Bank considers the failures identified by permanent tsb and Springboard to be very serious and their consequences to be completely unacceptable.
“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.
“To avail of the Mortgage Redress Programme, customers will have to engage with permanent tsb and respond to the letter which they will receive.
“We encourage impacted customers to consider their letter of offer and options carefully. We also encourage customers to use the money provided by permanent tsb or Springboard to obtain independent advice,” Rowland said.
“The Central Bank will continue to pursue its enforcement investigations against both permanent tsb and Springboard.”