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Permanent fined €21,000,000 in Ireland for regulatory breaches affecting tracker mortgage customer

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Christian Fernsby |
Central Bank of Ireland
Ireland   The Central Bank of Ireland

The Central Bank of Ireland reprimanded and fined Permanent TSB €21,000,000 pursuant to its Administrative Sanctions Procedure (“ASP”) in respect of serious failings to 2,007 tracker mortgage customer accounts which were impacted for the period between August 2004 and October 2018.


PTSB has admitted in full 42 separate regulatory breaches of the Code of Practice for Credit Institutions 2001 and the Consumer Protection Codes 2006 and 2012.

This marks the completion of the first in a series of ongoing industry investigations arising from the Central Bank’s Tracker Mortgage Examination (“TME”).

This fine is the largest imposed to date by the Central Bank under the ASP.

It reflects the gravity with which the Central Bank views PTSB’s failings and the unacceptable harm PTSB caused to their tracker mortgage customers, from extended periods of significant overcharging to the loss of 12 family homes and 19 buy to let properties.

In addition to the reprimand and fine, to date PTSB has also been required to pay €54.3m redress and compensation to its impacted customer accounts prior to and as part of the TME.

The Central Bank’s investigation into PTSB’s tracker related issues has been conducted in parallel with the TME.

Through its intrusive and forensic investigatory approach, the Central Bank has sought to determine how and why PTSB failed to fulfil its regulatory obligations to protect its tracker mortgage customers’ best interests and honour their contractual entitlements.

The investigation has found that PTSB denied its customers a tracker mortgage or did not put them on the correct tracker rate resulting from a number of failings:

Failure to warn certain customers about the consequences of decisions they might make relating to their mortgage: PTSB failed to warn certain customers that they would lose their tracker mortgage entitlements as a consequence of their request to break early from a fixed or discounted interest rate.

Operational and systems failings: PTSB did not have adequate systems and/or operational controls in place to enable them to meet their contractual and regulatory obligations to certain customers.

This included over-reliance on manual intervention and a lack of clarity at that time in relation to who was responsible for mortgage products within PTSB.

Decision to deny certain customers their correct tracker rate between 2009 and 2010: PTSB made a decision to deny certain customers their entitlements to the correct lower tracker rate between 2009 and 2010 unless the customer specifically requested it, or queried or complained.

Incorrect legal interpretation of contractual terms and conditions: PTSB denied certain customers their enduring contractual right to a tracker mortgage as a result of PTSB’s incorrect interpretation of the extent of certain customers’ contractual entitlements.

The Central Bank determined that the appropriate fine was €30,000,000, which was reduced by 30% to €21,000,000 in accordance with the settlement discount scheme provided for in the Central Bank’s ASP.


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