Return to tracker rates draws near for thousands of Irish customers

Irish banks face massive payouts following the Central Bank's tracker mortgage probe...

Return to tracker rates draws near for thousands of Irish customers

A collection of estate agents' boards offers properties 'for sale' and 'to let' outside residential housing in Dublin | Image: Aidan Crawley/Bloomberg via Getty Images

The end is in sight for some Irish bank customers who are looking for compensation after losing out on tracker mortgage rates.

Close to 2,000 Ulster Bank customers will receive letters next month informing them that they will be put back on tracker rates and that they will receive refunds next year, according to a report in the Irish Independent.

Ulster’s chief executive for the Republic Gerry Mallon previously said that the bank has set aside €118m to deal with this issue.

This comes after an industry-wide probe into a up to 10,000 cases across Ireland's banking sector when customers were moved off of tracker rates during Ireland's recession.

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Some 3,300 AIB customers were affected, they have been contacted by the bank and are also set to learn when they will be returned to their tracker rates in the coming weeks, according to the report.

AIB has set €190m aside to deal with costs associated with customers who lost out on tracker rates.

"On behalf of the bank I apologise to customers for these failures, which should not have happened and which we now intend to put right. I also want to assure customers that this review is receiving priority attention in order to ensure redress and compensation are delivered as quickly as possible," AIB Group CEO Bernard Byrne told mortgage holders.

This morning the bank told Newstalk that it has "no update to share" on this issue following these reports.

Meanwhile, Bank of Ireland is yet to release details regarding how many of its customers have been affected - and how much it will cost the bank to address the issue.

KBC Ireland's website says that the bank is currently undertaking an examination to identify cases where "tracker mortgage related issues," need to be dealt with.

These cases centre around customers who moved to 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%.

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