AIB plans to compensate 3,100 mortgage customers

This is part of an industry-wide probe involving 15 financial institutions...

AIB plans to compensate 3,100 mortgage customers

Rolling News

A submission to the Joint Committee on Finance, Public Expenditure and Reform has offered an update on AIB's efforts to compensate mortgage holders who have been overcharged.

According to the document, which has been seen by The Irish Times, 3,100 customers were overcharged as they were moved from fixed rates and were not informed that they could return to tracker rates.

Tracker mortgages are set at a fixed percentage or 'margin' above the ECB rate. As its rates plummeted during the financial crisis, Irish customers' rates should have dropped to close to 1%.

According to the AIB submission, "redress of compensation has been paid to circa 2,600 customer accounts and the remaining circa 500 in progress to be completed by the end of June."

Affected customers are expected to get compensation of close to 15% of the savings that they missed out on by being denied these rates.

15 Irish lenders are involved in the industry-wide probe into cases when customers were moved off of tracker rates.