Reuters logo
Ireland's PTSB may have to compensate 2,000 customers-source
February 5, 2015 / 7:38 PM / 3 years ago

Ireland's PTSB may have to compensate 2,000 customers-source

DUBLIN, Feb 5 (Reuters) - Ireland’s permanent tsb (PTSB) could have to compensate around 2,000 mortgage holders for failing to sufficiently warn them of the consequence of breaking the term of their particular loan agreements, a source familiar with the complaint said.

The state-owned mortgage lender said on Thursday that it was withdrawing a Supreme Court appeal relating to complaints made by two mortgage holders who should have been allowed to move to cheaper mortgages that track the low European Central Bank rate when they broke the term of their fixed-rate mortgages early.

Those mortgages had included a provision stating that at the expiry of the fixed rate term they could revert to the so-called “tracker” rate. However the bank did not permit them to do this when they broke the fixed term.

Ireland’s Financial Services Ombudsman found that ptsb had erred by not providing those customers at the time with all material information about the consequence of breaking the term, the bank said. The Irish High Court upheld that finding in 2012.

A spokesman for ptsb said that the bank was reviewing how it had dealt with all cases of customers in similar positions and that the matter was also the subject of an enforcement investigation by the Irish Central Bank.

The source said this could affect some 2,000 customers.

If the bank had to pay average compensation of 10,000 euros per customer for what they would have saved had they been moved to to a tracker mortgage, it would face a bill of 20 million euros.

The loss-making bank was the only Irish lender to fail European bank stress tests last year and has until July to raise at least 100 million euros from investors to fill the portion of the capital shortfall it cannot fund itself. (Reporting by Padraic Halpin; Editing by Greg Mahlich)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below