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Personal Finance

Almost 40,000 mortgage holders hit by tracker scandal as numbers of those affected rises

  • Rise of around 1,400 in cases conceded by banks since the summer
  • Lenders paid out €647m in redress and compensation to customers
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Central Bank. Picture: Gerry Mooney
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The number of mortgage holders hit by the tracker scandal has shot up again.

The latest update from the Central Bank shows that there are now close to 40,000 mortgage holders who are victims of the massive rip-off.

There has been a rise of around 1,400 in the cases conceded by the banks since the summer.

Up to the end of last year lenders had paid out €647m to customers affected by their failure to ensure people did not lose valuable tracker mortgages.

This is an increase of €67m on the figure in August.

The Central Bank said 39,800 mortgage account holders had been impacted by the scandal at the end December.

And regulators said more customers are likely to be included in the probe of 15 lenders for taking trackers off customers.

The Central Bank will continue to challenge all lenders until it is satisfied that all groups of affected customers have been identified, it said.

It is not mentioned in the latest update, but more than 100 mortgage holders lost their homes after banks illegally denied them trackers.

The probe is the largest conducted by the Central Bank. It has been going on for three years now, and has cost the banks €1bn. The probe is expected to finish this year.

Some 97pc of those impacted have received redress and compensation. Most are put back on a tracker rate, cutting monthly repayments by up to €500.

Six lenders are the subject of enforcement investigations by the regulator over the scandal. They include AIB, its EBS subsidiary, Bank of Ireland, Ulster Bank, Permanent TSB, KBC Bank.

Director general financial conduct at the Central Bank Derville Rowland said enforcement investigations are being conducted in parallel with the Central Bank’s tracker examination. 

As enforcement investigations are at different stages, they will conclude on different timelines, with  some concluding this year.

“The extensive, intrusive and complex work we’ve undertaken throughout the examination has always been about ensuring that lenders identify, redress and compensate affected customers for the wrong which they caused. The vast majorityof affected customers have now been identified and paid, with €647m in redress and compensation paid out at end-December.”

“As the supervisory phase of the examination is nearing completion, we will continue robustly to challenge the work lenders are doing in identifying, redressing and compensating those customers affected.”

Ms Rowland said the probe has revealed the unacceptable damage that misconduct can cause to consumers, including the loss of their homes and properties in some cases.

Fianna Fáil’s spokesperson on finance, Michael McGrath said: "It is extraordinary to think that over three years on from the launch of the Central Bank tracker probe in December 2015, the banks are still finding more and more customers affected by the scandal. “

He said this is evidence that some banks have dragged their feet every step of the way and have sought to minimise their liability at every turn.

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Central Bank. Picture: Gerry Mooney