Tracker mortgage redress reaches €78m

The Central Bank has so far identified a further 7,300 accounts that were affected - but have not yet received compensation

The Central Bank has identified hundreds more customers that were affected by the tracker mortgage scandal.

In the latest report on its investigation into the affair, the Central Bank said it had now identified 9,900 impacted customers – an increase of 1,700 on the figure issued in December of last year.

The latest update revealed that lenders have paid out €78m in redress to around 2,600 customers to date.

Central Bank governor Philip Lane told the Oireachtas Finance Committee in December that the number of impacted customers could eventually rise above 15,000.

Tracker Mortgages

Tracker mortgages are set at a fixed percentage or 'margin' above the European Central Bank rate.

As its rates plummeted during the financial crisis, customer rates should have dropped to close to 1%.

However the probe has revealed that thousands of customers were overcharged or wrongly denied a tracker rate - leading to customers facing mortgage refusals and in some cases, potential home repossessions.

Up to 15 lenders are involved in the probe and are now facing the prospect of having to restore the rates and make repayments – which could be worth an average of between €25,000 and €30,000 per customer.

Comprehensive redress scheme

In a statement this afternoon, the Central Bank said the investigation is a “priority” adding that the last of the impacted customers should be identified by no later than the end of September.

It said lenders have an obligation to identify affected customers, stop further financial harm to them and put in place a comprehensive redress scheme.

Lenders are also expected to provide additional payments to allow customers seek independent professional advice.

“The Central Bank will take appropriate supervisory action, up to and including enforcement action where necessary, in order to ensure lenders deliver fair outcomes for impacted customers,” said the statement.

The Central Bank investigation involved an initial review of more than two million mortgage accounts.

Approximately 100,000 accounts were then identified for further review - around 10% of which have been identified as affected accounts to date.