The banks are not offering "compensation" - it's a refund of our money which they overcharged us!

Brendan Burgess said:
They say "redress and compensation" . But I agree with you . "Refunds" would be a much better word. If the normal compensation is 10% of the refund due, it means that the refunds were about €65k and maybe €13k compo.
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I think it should be called Overcharge Refunds. Why do they get away with misleading terminology that makes it look like they are the good guys and that mortgage holders are getting millions when it's not true.
 
Bronte said:
I think it should be called Overcharge Refunds. Why do they get away with misleading terminology that makes it look like they are the good guys and that mortgage holders are getting millions when it's not true.
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Good point. Of course there should be consequences for the banksters who planned this deliberate overcharging of so many customers but this is Ireland so it won't happen.
 
In an effort to encourage 'refunds' rather than other terminology
https://www.irishtimes.com/opinion/letters/tracker-mortgages-and-the-banks-1.3026642?mode=amp

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notabene said:
In an effort to encourage 'refunds' rather than other terminology
https://www.irishtimes.com/opinion/letters/tracker-mortgages-and-the-banks-1.3026642?mode=amp
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Great letter. The terminology is certainly misleading. The public needs to be reminded that we are simply being refunded our own money stolen from us by the banks in an industry wide "scam". The redress being offered is paltry and the consequences for the individuals who deliberately took these tracker rates away from customers are non existant.
 
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The terminology used may actually have another significance - tax.

A refund or return of money is obviously not taxable but compensation or redress payments are taxable unless specifically exempted by statute.
 
The Central Bank directs that any tax implications are to be taken care of by the banks - however how exactly that is to be resolved is a little less clear...

Any tax liability that impacted customers may incur as a result of the relevant issue or in respect of any redress, compensation or other payment made to impacted customers by the lender, as a result of the relevant issue, are to be discharged by the lender. The lender is to liaise directly with Revenue in this regard.
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Page 8 of 9 of the "redress principles" as published by the Central Bank.
 
Indeed but that doesn't really change my core point.

If the lender is discharging an impacted customer's tax liability, that means the customer is receiving the compensation payment net of tax. There is no need to net any tax from a refund.

As a separate matter, it will be interesting to see how Revenue deals with (what turn out to be) excessive reliefs or deductions.
 
This is great. I think the consumer voice should be, if at all possible, an impacted person who has great communication skills like Niamh.
 
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