Irish bank Permanent TSB has been reprimanded and fined €21m by the Central Bank for regulatory breaches affecting tracker mortgage customers.
The charge is in respect of "serious failings" to 2,007 tracker mortgage customer accounts which were impacted between August 2004 and October 2018.
In addition to the reprimand and fine, PTSB also has to pay €54.3m redress and compensation to its impacted customer accounts to date.
PTSB 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 investigations arising from the Central Bank's Tracker Mortgage Examination.
This fine is the largest to date by the Central Bank under its Administrative Sanctions Procedure (ASP).
Loss of 12 family homes
The Central Bank said: "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."
"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 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
- Operational and systems failings
- Decision to deny certain customers their correct tracker rate between 2009 and 2010
- Incorrect legal interpretation of contractual terms and conditions
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.
The Central Bank's director of enforcement, Seána Cunningham, said: "Taking out a mortgage is the single most significant financial commitment most people will make in their lifetimes.
"Consumers must have confidence that lenders are acting in their best interests, particularly given the complexity of mortgage documents they need to understand in order to make the best decision.
"Firms must fully adhere to all legal and regulatory obligations, including the Central Bank's Consumer Protection Codes that we have put in place to ensure that consumers are treated fairly by the firms we regulate.
"Our investigation found that PTSB failed to put their customers first, with distressing and, in some instances, devastating consequences.
"PTSB failed in their obligations to do the right thing by their customers. In doing so, they broke the trust of their customers and damaged the public's confidence in PTSB."
"At a minimum, customers should be provided with clear and timely information and warnings about their mortgage, the highest levels of customer service and a commitment from their lender to put things right promptly and fairly should they go wrong.
"My message today is clear. Where firms fail to protect their customers' best interests, our response will be robust and the consequences will be serious."
In response, PTSB CEO Jeremy Masding said: "On behalf of Permanent TSB, I apologise unreservedly to all customers affected by the tracker mortgage issue, and for the distress caused as a result.
"Addressing and resolving the tracker mortgage issue for the account holders of the 2,007 impacted accounts has been of the highest priority for the board and management team in Permanent TSB.
"We are confident that we have fully addressed the operational and procedural weaknesses which have been identified in this exercise and, we remain committed to improving our policies and procedures for all customers."