AIB Central Bank fines AIB €83m

Brendan Burgess

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Enforcement Actions Notice – 23 June 2022

Central Bank concludes Allied Irish Banks p.l.c. and EBS d.a.c. Tracker Cases



On 23 June 2022, Central Bank of Ireland announced the completion of enforcement actions against Allied Irish Banks p.l.c. (AIB) and EBS d.a.c. for consumer protection breaches relating to tracker mortgages. The Central Bank imposed fines of €83.3m and €13.4m respectively. The outcomes represent the fourth and fifth tracker mortgage enforcement outcomes, with just one firm-level investigation remaining open in relation to a separate lender. The fines bring the total sanctions imposed on lenders for tracker mortgage failings to €174m, on top of €737m paid to customers in redress and compensation under the Central Bank-initiated Tracker Mortgage Examination.
 

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Just deserts for an institution that cynically and systematically deprived its customers of their contractual entitlements. There are no excuses for this behaviour and it is only right that the regulator, who arrived late to the party, is levying this level of a fine on the institutions concerned.

People lost properties and needlessly suffered as a result of this behaviour and were overcharged, leading to their incurring increased living costs than otherwise might have been incurred. The negative effects of the bank’s behaviour are still being felt by many.
 
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A major reason for the high fine has been their approach to Prevailing Rate customers. I feel vindicated!


 Breached customers’ mortgage contracts, delayed in rectifying the breach, and failed to take
immediate and conclusive action to determine for these customers the financial implications
of its wrongdoing: AIB breached customers’ mortgage contracts by failing to offer them the
option of a prevailing tracker rate at the expiry of their fixed rate periods, as they were
contractually required to do (“Prevailing Rate Customers”). AIB failed to re-introduce a
prevailing tracker rate until December 2013, and even then, on a go-forward basis only, by
which time over 6,523 customer contracts had been breached. AIB failed to take immediate and
conclusive action to determine the financial implications of the breach for those customers.
 
I am actually beginning to feel sorry for AIB.

Derville Rowland said:

Our investigation found that when AIB withdrew its tracker mortgage offering there was no proper
regard or concern for the impact on its customers. What followed was a litany of failings where
customers were wrongly denied their tracker entitlements and others lost their tracker rates due to
AIB’s deficiencies in its provision of day to day mortgage services. In respect of many of its failings, AIB
had opportunities to act in order to address those failings and prevent further breaches of its customers
entitlements - AIB failed to take these opportunities. Underpinning AIB’s failings over a prolonged
period of time was a culture of failing to properly consider and recognise the rights of its customers and
its obligations to them.
 

I'd be a bit more impressed if the Regulator had punished itself for its tardy response to this scandal. But it has a long and proud tradition of sitting comfortably on the sidelines while doing as little as possible.

​

 
Before the Central Bank got involved, both AIB and EBS gave trackers to people who complained but did not apply the redress to people who did not complain.

 Failed to handle customer complaints in a fair and consistent manner: EBS treated customers
differently in some instances depending on whether they complained or not about their tracker
rate and failed to provide the same remedy to customers who were equally affected but did not
complain.


 Failed to handle customer complaints in a fair and consistent manner: AIB implemented an
unfair strategy where AIB treated its customers differently depending on whether they
complained or not about AIB’s failure to offer them a tracker rate. Certain customers were
provided with a tracker rate if they pursued their complaint to the Financial Services and
Pensions Ombudsman (the “FSPO”) whereas AIB failed to provide the same remedy to
customers who were equally affected but did not complain.
 
Brendan Burgess said:
I am actually beginning to feel sorry for AIB.
Click to expand...
I don't know how you could feel sorry for them, the situation is a complete omnishambles of their own making.

Hunt is deeply sorry and distressed himself for the distress caused, ha! really it's just for being caught out...

I believe the fines are irrelevant to them, the lot should be sacked, why are the police not undertaking their own investigation ??

Where is Mr Hunt's resignation, don't CEO's and boards normally resign when this sort of "staining" is caused on an institutions reputation???

And I think it is more than just a stain on their reputation, in my opinion, they have attached their reputation to a toilet brush, it is in tatters now.

A "fair" mortgage. How could anyone trust them now, I am at a complete loss as to how anyone could seriously walk in and apply for a mortgage or any loan for that matter from any one of the institutions caught up in this examination.

And what is the future for Irish banking, with Ulster bank and KBC exiting, they have effectively just had a lottery win with 1.2 million customers flocking to them, they will recover that 80 million in a heartbeat.

Sorry for the rant!
 
The mind boggles -how these absolute clowns ran a bank. Anyone involved in this should not only be ashamed of themselves, professionally as well as personally, but they should also resign. Senior management ( if they haven’t taken their pensions and run ) and especially the board- who are there for make strategic decisions for the bank and time and again at the AGM backed this decision before the ombudsman put them in their place. I wouldn’t let these people run a three legged race never mind a bank
 
October2019 said:
especially the board- who are there for make strategic decisions for the bank and time and again at the AGM backed this decision before the ombudsman put them in their place.
Click to expand...

Yes, Paschal Donohoe was saying in the Dáil he was bringing in legislation to make people accountable.

He doesn't need legislation. He can kick out the board members who were there when they were contesting the Prevailing Rate redress.

Brendan
 
You are vindicated Brendan. AIB still today continue to twist and argue every possible legal way out against proper redress for the customer. Customer compensation from FSPO is totally inadequate given the stress and length of time to investigate. Case of Karen, while you accepted , in my view still fell short on a financial level. AIB know this and will not engage directly with customers in a meaningful way. Happy to leave it to the FSPO.
 
I would imagine that AIB don't really care about this massive fine because the customers are going to end up paying for it. Why are some people who made the decisions in AIB not brought to court if this was a crime? Or was it a crime and if not what is it considered to be? I know another institution was involved here as well, same applies to them. Did the banks commit a crime? If so.
 
To no one's great surprise, the CBI has declared itself very satisfied with how it handled the tracker mortgage scandal over 18 years!

https://www.businesspost.ie/news/ce...ed-with-handling-of-tracker-mortgage-scandal/


However both the Business Post and I believe that its role needs further scrutiny:

 
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You couldn't make this stuff up!

Award for AIB’s Colin Hunt a week after bank’s record €97m tracker mortgage fine

The chief executive of AIB, Dr Colin Hunt, is to receive an award for business leadership at a black-tie dinner just a week after his bank was hit with a record €97 million fine for its role in the tracker mortgage scandal.
www.independent.ie

He is due to be presented with the 2022 Global Business Leadership award by the Ireland-US Council, a not-for-profit organisation set up in 1963 to promote business links between the two countries.
 
I am just after reading this article in The Independent......and am wondering if I am dreaming
 
Egg in face once again to AIB customers. Actually cannot digest this. Devil may care....What's 97 million and a scandal when one can don black tie.
 
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You just have to laugh otherwise you’d go loopy
 
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