Permanent TSB have been told they must compensate some 2,000 customers who have been wrongly denied tracker mortgages.
In February, the bank withdrew its appeal against a High Court finding that the financial services ombudsman was right to decide that two couples were entitled to cheap tracker rates.
PTSB had initially refused to allow certain customers who had switched from a tracker rate mortgage to a fixed rate mortgage for an agreed term to revert back to the tracker rate mortgage – on the basis that the customers had come off the fixed rate early.
The difference in cost between a tracker rate and variable rate could be anything between €5,000 and €7,000 a year.
Two months on though, the 2,000 affected customers still haven’t been paid back or compensated, and Fianna Fáil has urged PTSB to cough up.
The party’s finance spokesman Michael McGrath also called on the Central Bank to intervene when banks fail their own customers.
Deputy McGrath said: “It is now over two months since PTSB withdrew the Supreme Court appeal and essentially held its hands up on this issue. It is estimated that 2,000 mortgage holders were wrongly denied a tracker rate when they came off their fixed rate and, as a result, ended up paying thousands of euro in additional interest.
“I have raised this issue in the Dáil with Minister Noonan and directly with the bank. I know that some customers were overcharged tens of thousands of euro in interest as the wrong rate was applied. Some customers have been pursuing this issue for up to five years.”
Mr McGrath added: “A number of things now need to happen. The bank needs to contact all the customers affected by this issue and immediately put them on an appropriate tracker rate.
“The bank needs to repay these customers all the additional interest they were wrongly charged on their mortgage and the customers should also be compensated by the bank for being treated in this manner.
“Furthermore, the Central Bank needs to use its enforcement powers to ensure there is an adequate deterrent in place to prevent issues like this happening again.”
The 2,000 mortgage holders affected opted to take out fixed rates in 2008 and 2009 when the European Central Bank interest rate was on the rise.
They were told they could move to a tracker rate at the end of the term of the fixed rate – but PTSB refused to put them on cheap tracker rates.
Deputy McGrath said: “PTSB is now looking for people to invest in the bank as it seeks a sustainable path to recovery and I wish the bank well in that regard as I believe it is vital that PTSB’s future is secured, enabling the bank to provide badly needed competition in the Irish market.
“However, if the bank is to attract the investment it needs, it must demonstrate that it will act swiftly when it becomes clear that it has treated its own customers badly.
“The bank needs to seize this opportunity and proactively deal with this important legacy issue affecting around 2,000 customers.”