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Irish central bank fines Permanent TSB unit €21M over tracker mortgage scandal

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Irish central bank fines Permanent TSB unit €21M over tracker mortgage scandal

The Central Bank of Ireland fined Permanent TSB Group Holdings PLC unit Permanent TSB PLC €21 million as part of an investigation into the so-called tracker mortgage scandal involving several Irish banks.

Permanent TSB admitted to 42 separate regulatory breaches regarding 2,007 tracker mortgage customer accounts that were impacted between August 2004 and October 2018. The lender has paid €54.3 million in redress and compensation to the affected customers to date.

The Irish central bank said it found Permanent TSB had failed to warn certain consumers about the consequences of requesting to break early from a fixed or discounted interest rate. The bank also did not have adequate systems and operational controls to meet contractual obligations to their clients.

Certain customers were denied their correct tracker rate between 2009 and 2010, while some consumers were not given their contractual right to a tracker mortgage as a result of the lender's incorrect legal interpretation of terms and conditions, according to the central bank.

The regulator's fine includes a 30% reduction in accordance with the early settlement discount scheme provided for in the central bank's administrative sanctions procedure.

Permanent TSB noted the impact of the penalty will be "a small charge" in its 2019 financial results, as the bank has previously made provisions for the overall tracker mortgage program.